American Century Ultra Fund Q3 2025 Contributors/Detractors And Notable Trades

In its Q3 2025 commentary, American Century highlighted Alphabet (GOOG) as a key contributor after the company received a relatively benign antitrust ruling that would not force Alphabet to sell assets. The ruling reduces a material regulatory overhang for the company, supporting near-term investor sentiment and removing a downside litigation outcome, though no financial figures were provided.

Analysis

Market Structure: The benign antitrust ruling removes a near-term binary breakup risk for Alphabet, preserving its search/ad stack pricing power and likely boosting CPMs and margins versus peers; expect an initial 3–7% re-rating in GOOG/GOOGL over days as risk premium compresses. Winners are Alphabet, Google Cloud (defensive revenue mix), and large ad buyers who benefit from stable inventory; smaller adtech players and agencies that compete on pricing/innovation are the relative losers.

Risk Assessment: Tail risks include DOJ/state appeals, adverse EU rulings, or new privacy laws (e.g., cookieless targeting) that could cut ad revenue 10–25% over 12–24 months; operational risks include ad fraud/regulatory fines. Near-term (days–weeks) volatility should fall; medium-term (3–12 months) regulatory headlines and ad spend cyclicality will drive direction; long-term (years) structural privacy/competitive shifts can erode margins.

Trade Implications: Primary actionable is a measured overweight in GOOG/GOOGL to capture de-risking, using equity and defined-risk options; expect 12–18% upside potential in 3–6 months if ad demand normalizes. Cross-asset: expect modestly tighter IG spreads and lower equity vols; USD may modestly strengthen on risk-on flows, commodities largely unaffected.

Contrarian Angles: Consensus underprices multi-jurisdiction risk—benign US ruling may push regulators toward behavioral remedies that subtly limit product integration without forcing a sale, reducing long-term optionality. Reaction could be underdone: a short-term rally may reverse on appeal or EU action; size positions so a negative regulatory surprise can be absorbed (<=3% position sizing).

Key Decisions for Investors

• Establish a 2–3% long position in GOOG/GOOGL within the next 5 trading days to capture de-risking; set a tactical target of +12–18% over 3–6 months and a hard stop-loss at -8% from entry.
• Buy a 3–6 month 25–30 delta call spread on GOOG sized to 1–2% of portfolio notional (cost-limited) to capture upside while limiting premium outlay; close if GOOG > +20% or IV spikes >40% percentile.
• Sell 30-day OTM cash-secured puts on GOOG at ~5–8% OTM for up to 1% portfolio allocation to collect premium and potentially establish a lower-cost base; avoid assignment if regulatory appeal is filed within 30 days.
• Pair trade: go long GOOG (1–2%) and short SNAP (SNAP) (1%) to express concentration of ad platform dominance vs. cyclical/social ad exposure; rebalance if spread compresses by >50% or if Snap reports upside ad trends.
• Rotate 2–4% of portfolio from small-cap adtech and ad-agency stocks (underperformers) into mega-cap tech/communication-services (GOOG, MSFT) over the next 2–6 weeks; reduce exposure if regulatory headlines escalate or ad GDP indicators fall >10% year-over-year.