r/valueinvesting
GOOGL crashing - is this a buying opportunity?
Views GOOGL's 5% drop to 27x PE as a buying opportunity given strong fundamentals and earnings growth.
- Valuation has become more attractive with PE contracting to 27x.
- Core business fundamentals remain unchanged despite price action.
- Strong earnings trajectory suggests continued growth potential.
GOOGL has crashed 5% this month and reaching PE 27. Fundamentals haven't changed and the earnings are extremely strong - they will probably grow once again.
This looks like a small correction to me. Are you buying more shares or do you think it will drop more?
It’s down 2% after doubling in the last 6 months
Google is a buy and hold forever stock. I DCA into it every Friday with the rest of my buys and will never sell a single share. I don’t even care what price it is.
It is an asset. Google is probably the best company on earth. I want to build a position in Google that is substantial enough to take out loans against it or use it as collateral elsewhere in my life. I’d rather own $1MM of Google than a $1MM house any day of the week.
This guy gets it
A 5% drop isnt really a crash. The real question is whether a PE of 27 is actually cheap for a company facing increasing competition in AI and search.
You realized that their search/advertizing revenue increased by 20% in the last quarter?
True, but Kodak’s film business was growing right before digital photography won. Strong current results don’t automatically tell us what the business looks like a decade from now.
this is a very interesting comparison. dont u think its because kodak completely ignored the transition to digital photography? Do you think Google is ignoring this transition into AI search and sponsored results within it?
Google is very well positioned for the AI revolution, has increasing margins and is the most profitable company in the world right now. If you think it is going to be disrupted, buy the disruptor if you can identify them 😀
Compared to the rest of Mag7 it’s the more diversified (cloud, search, YT, android) but it’s huge reliance on ads makes it more akin to Amazon (reliance on real consumer spending) vs Microsoft (enterprise focus). It’s also doing better in AI than the rest of Mag7 with Gemini, TPU, etc. Nvidia is pure-play AI pick anda shovel and Tesla is Tesla.
Compared to other AI labs (OAI, Anthr) Google also has more money to invest (though that hasn’t resulted in superior models thus far).
So it’s a lower risk lower reward bet than the AI labs
Fair point. My concern isn’t Google’s ability to compete in AI, it’s whether AI changes user behavior faster than Google can monetize it. Search has been an incredible business for decades, but if users increasingly get answers directly from AI, the economics could look very different even if Google remains a major player.
Google isn't crashing...if your going to make a post then at least have it be something coherent. Crashing cone on. Is it a buying opportunity? Yes if your a long term investor. Google isn't or won't crash but it could of course go lower.
I think something that everyone should consider is that Big Tech looks like it’s turning from asset light, low capex companies into heavy capex companies. The fact that Google is raising capital through issuing new stock is concerning. The actual cost of AI seems to be higher than what we have previously witnessed. Also, a bet on AI is different than a bet on an AI business. There have been many revolutionary technologies where the builders of those technologies either went bankrupt or did not capture the profits from the technologies productivity gains. Google may be flying high right now, it’s possible that it continues to be a heavy capex spender.
buying, yes, added 2 leaps last week. if we go lower i will buy more. I buy anytime RSI is below 35, I try for 35,25,15 accumulation. Then I will sell CCs above RSI 85 20% OTM 180DTE I can trim leaps at this time as well if i need cash for something else.
GOOG turned into a defensive stock while on astronomical EV. I think that's why BRK is loading up on it from riskier assets