Google’s AI Boom VS Market Gloom

Dear Investor,

Are you a bear on Google? Then I have a question for you…

Which search engine led you to this gem of an article? Bears, I have news for you. Google’s about to have its NVIDIA moment soon. I’m convinced it’s wildly undervalued and poised to skyrocket and I will explain why below…

Google's earnings per share are outpacing its stock price, squeezing its P/E ratio to a lowly 18.4, cheaper than the S&P 500. Investors are spooked, fed a story that ChatGPT and other AI models threaten Google’s search dominance, its cash cow. With ChatGPT boasting half a billion users and Grok climbing app charts, the vibe around Google feels gloomy. But let’s be real: Google’s woven into your life, and claiming it’s stagnant is nonsense.

Every Google segment, Search, YouTube, Cloud, grew 12% year-over-year, faster than last year. Net income soared 46%, EPS jumped 49%, and operating margins climbed, proving Google’s got leverage. Free cash flow hit $19 billion this quarter, with $70 billion annually and another $70 billion in buybacks authorized.

Search is thriving, with 2 billion daily users and AI Overviews hitting 1.5 billion monthly users, boosting engagement in 140 countries.

Gemini 2.5, Alphabet’s shiny new generative AI model, has landed with breakthroughs in reasoning, coding, and math, earning top industry praise and early user love. Google’s flexing hard, weaving Gemini’s AI stack models, infrastructure, and platforms into 15 products serving over half a billion users. Google Assistant is getting a Gemini-powered makeover across devices, and unlike ChatGPT, Google’s playing a different game, embedding Gemini into every corner of its ecosystem. It’s becoming the Siri of Android, with Assistant integrations, while new AI agents and multimodal models expand into robotics and health. The Gemini app and its consumer experiences are gaining serious traction, with users raving and adoption soaring.

Google Cloud surged 28% to $12.3 billion, with margins at 17.8%. YouTube, the Netflix slayer, grew ad revenue 10% and boasts 270 million subscribers across its services.

And Waymo? This is the new kid on the block that is going to drink Tesla’s milkshake. It’s scaling fast, hitting 250,000 weekly paid rides, up from 10,000 a year ago, with expansion plans and Uber partnerships.

Waymo’s scaling up fast, partnering with fleet operators and advancing features like airport access and freeway driving. They’re testing diverse business models, including licensing deals, making Waymo an increasingly valuable gem in Google’s crown as revenue and capabilities surge.

The data screams strength. Google’s not just surviving the AI shift…it’s leading it and many don’t see it…

Do you afraid that the government will break it in pieces? Is that so bad as you think?

Bearish? Please….

May Investorean Be With You

Until next time

TKR