I don’t get it. Why is Google, with all its profit and strong capital use, the only big tech company with a low PE? It’s been like this for years, even though they’ve grown their revenue by 14% a year. Am I missing something? Was the market never efficient? Should we stop investing in index funds?
It’s probably because of antitrust concerns and management not wanting to take risks or shake things up.
At least 90% of Congress holds Google stock.
Or maybe Google holds 90% of Congress?
Now that’s what I call a moat!
Google’s financials are solid, and they’re a strong competitor in so many areas. In a world where some valuations seem almost random (like Tesla), why is Google treated differently?
The Department of Justice has been after them for a while. But I disagree that they’re playing it safe. Look at Microsoft backing OpenAI, while Google is building its own models. Waymo is far ahead of Tesla in autonomous driving. Google is a great buy, even with the DOJ issue hanging over them.
But their lower PE started long before the DOJ stuff. Other big tech companies, like Microsoft and Nvidia, are also dealing with antitrust issues. So, this alone doesn’t explain it.
Totally agree. But what does that say about how the market values companies?
Honestly, I can’t say for sure. All I know is that anyone holding Google for 5+ years will probably do well.
I think it’s partly because people still don’t fully trust their ability to grow beyond search.
That’s fair, but their cloud and AI divisions are showing promise.
Looks like they’re cutting back, just like Facebook/META did.
Competition is keeping them sharp. I like seeing that.
What’s crazy to me is that Apple used to have the lowest PE among the big tech companies for years. Now their PE is at 42, higher than Microsoft (36), Meta (27.6), and Google (25.6). Only Amazon (48), Nvidia (53), and Tesla (115) are higher. I’m not complaining as an Apple shareholder, but I don’t see where their growth is going to come from compared to Microsoft, Meta, and Google.
I think about this all the time. Apple keeps climbing by marketing AI features from other companies. It’s wild, but I’m not complaining either.
Meanwhile, they haven’t grown their revenue in years.
They’ll just slap a screen on something new and call it a win.
A lot of people think Google’s search business is at risk, and that’s most of their income. Apple might stop using them as the default search engine, and regions like Europe and Asia are leaning towards alternatives. Their lead in search quality is slipping too, and AI-powered search engines are offering better experiences.
Apple dropping them is unlikely unless it’s forced. Google’s payments make up a big chunk of Apple’s income.