Ali Mogharabi: At current levels, we think Alphabet shares are attractive, as the stock is now a 4-star.

We're confident that the Alphabet network effect and data moat sources will keep driving growth in the size and overall usage of Google's ecosystem. We think this will help Alphabet stay as the behemoth in online advertising and make more headway in consumer hardware and enterprise cloud businesses.

Now, regarding Q3, Alphabet posted slightly mixed results with revenue a bit light because of a foreign exchange headwind, while operating actually margin came in above our estimate and in line with consensus.

Growth in ad revenue remained strong, which we think demonstrates the health of Alphabet's network effect moat source in that segment. We expect strong double-digit ad revenue growth going forward as Google continues to further monetise its various apps, like Google Maps.

We must note that deceleration in other revenue growth was disappointing. We expect revenue growth in that segment to pick up in the fourth quarter due to the seasonally higher hardware sales and some return on Google's continuing investment in its cloud sales team.

And regarding the bottom-line, operating margins were helped by what appears to be some stabilization in traffic acquisition cost as a percentage of revenue.

The stock is now trading at a 20 per cent discount to our US$1,300 per share valuation. Now, in addition to that 20 per cent upside, we think there's an attractive call option on this name as Alphabet's Waymo is now testing the commercialisation of rides provided by self-driving vehicles that have Waymo's operating system.