# I Can't Stay Quiet on Google Stock (GOOG) Any Longer Source: https://www.youtube.com/watch?v=0i2qkboRQRQ Recap page: https://rapidrecap.app/video/0i2qkboRQRQ Generated: 2025-12-18T23:05:28.158+00:00 --- ## Quick Overview Google stock (GOOG) is presented as a strong long-term investment due to its massive AI investments, leading to significant growth in Cloud revenue ($155 billion backlog, up 46% Q/Q) and the success of Gemini (7 billion tokens/min processing, 650 million monthly active users), despite facing competition from Nvidia and slower growth in search advertising compared to the broader digital ad market. **Key Points:** - Google Cloud's AI revenue is a key driver, with the Cloud backlog growing 46% quarter-over-quarter to $155 billion. - Gemini processes 7 billion tokens per minute via direct API use and the Gemini app has over 650 million monthly active users, with queries tripling since Q2. - Alphabet's Q3'25 Capital Expenditures reached $23.953 billion (up 83% Y/Y), driven by heavy investment in AI infrastructure like custom TPUs (Ironwood) over relying solely on Nvidia GPUs. - Google Cloud holds 13% market share in cloud infrastructure services as of Q3 2025, behind AWS (29%) and Azure (20%), but is showing strong growth. - Google's Search revenue growth is slowing (14% Y/Y growth for Q3'25) compared to its historical growth rate, raising concerns about generative AI disruption. - Alphabet's P/E ratio (29.8x) is slightly below the peer average (32.1x) despite having lower projected earnings growth (10.14%) than peers like Amazon (15.83%). - The speaker plans to dollar-cost average into GOOG stock in 2026, believing it is undervalued compared to peers like Nvidia and Broadcom, which dropped rank on the speaker's watchlist. ![Screenshot at 00:03: The NVIDIA AI-Q Blueprint interface is shown, where the speaker asks an AI assistant to write a brief describing strategies and priorities, setting the stage for an analysis heavily focused on technology and investment strategy.](https://ss.rapidrecap.app/screens/0i2qkboRQRQ/00-00-03.png) **Context:** The video analyzes the investment potential of Alphabet (Google) stock, focusing heavily on its strategic pivot towards Artificial Intelligence, particularly with its Gemini models and custom TPU hardware (Ironwood). The speaker uses financial data from Alphabet's recent earnings calls, market share charts for cloud and AI advertising, and peer comparison metrics (like P/E ratio) to argue why GOOG is currently undervalued despite competitive pressures from Nvidia and slowing growth in its core search business. ## Detailed Analysis The speaker argues that Google stock (GOOG) is undervalued despite concerns about generative AI disrupting its search revenue. The video highlights several key successes: first-party models like Gemini process 7 billion tokens per minute via direct API use, and the Gemini app has over 650 million monthly active users, with queries tripling since Q2. Google Cloud is accelerating growth, with its AI revenue acting as a key driver, resulting in a Cloud backlog growing 46% quarter-over-quarter to $155 billion. Alphabet's capital expenditures are aggressively increasing, reaching $23.953 billion in Q3'25 (up 83% Y/Y), as they invest heavily in custom AI hardware like the 7th generation Ironwood TPU rather than relying solely on competitors like Nvidia. In the cloud infrastructure market, Google Cloud holds 13% share in Q3 2025, trailing AWS (29%) and Azure (20%). YouTube's dominance in streaming (12.6% share) is noted, but Google's search advertising revenue growth is slowing. Financially, Google's P/E ratio (29.8x) is slightly below the peer average (32.1x), though its projected earnings growth (10.14%) lags behind peers. The speaker concludes that Google's stock should be bought through dollar-cost averaging in 2026, citing its strong AI foundation and massive infrastructure investments as key to future performance. ### Google's AI Growth & Infrastructure - Gemini processes 7 billion tokens/min via direct API; Gemini app has 650M+ MAU, queries up 3x from Q2 - Cloud backlog grew 46% Q/Q to $155 billion - Alphabet CapEx reached $23.953B in Q3'25 (+83% Y/Y) due to custom TPU (Ironwood) investment. ### Market Positioning & Competition - Google Cloud holds 13% of the cloud infrastructure market (Q3 2025), behind AWS (29%) and Azure (20%) - Google's search revenue growth is slowing (14% Y/Y in Q3'25) - YouTube leads TV streaming share at 12.6% (Sep 2025). ### Valuation & Investment Thesis - GOOG trades at 29.8x P/E, below the peer average of 32.1x, despite lower projected earnings growth (10.14%) than peers like Amazon (15.83%) - Warren Buffett's Berkshire Hathaway revealed a $4.3 billion Alphabet stake purchased in late 2025. ### AI Competition - Meta Platforms is reportedly shifting to Google AI chips, potentially threatening Nvidia's market share - Google Cloud is prioritizing its custom TPU/Axion chips over Nvidia GPUs to power its AI workloads. ![Screenshot at 00:03: The NVIDIA AI-Q Blueprint interface is shown, where the speaker asks an AI assistant to write a brief describing strategies and priorities, setting the stage for an analysis heavily focused on technology and investment strategy.](https://ss.rapidrecap.app/screens/0i2qkboRQRQ/00-00-03.png) ![Screenshot at 00:47: A table comparing the Market Cap and Year-to-Date performance of various IT companies, highlighting Alphabet \(Google\) with 60.4% YTD gain and a 44.7% gain vs. SPY.](https://ss.rapidrecap.app/screens/0i2qkboRQRQ/00-00-47.png) ![Screenshot at 01:14: A bar chart showing the Global Digital Ad Spending Market size from 2023 to 2033, forecasting a total size of $1,545.2B in 2033, growing at a 10.2% CAGR.](https://ss.rapidrecap.app/screens/0i2qkboRQRQ/00-01-14.png) ![Screenshot at 02:38: A stacked bar chart comparing Google's Q3'24 and Q3'25 revenues by segment, showing Google Search & Other revenue growing 15% Y/Y to $56,567MM in Q3'25.](https://ss.rapidrecap.app/screens/0i2qkboRQRQ/00-02-38.png) ![Screenshot at 09:43: A bar chart displaying Alphabet Capital Expenditures in millions from Q3'24 to Q3'25, showing Q3'25 expenditures at $23,953MM, an 83% year-over-year growth.](https://ss.rapidrecap.app/screens/0i2qkboRQRQ/00-09-43.png)