Google is probably the most undervalued tech company there is currently, by far:
1.) Has cutting edge in house AI models (Like OpenAI, Anthropic, Grok, etc.)
2.) Has cutting edge in house AI hardware acceleration (Like Nvidia)
3.) Has (likely) cutting edge robotics (Like Boston Dynamics, Tesla, Figure)
4.) Has industry leading self driving taxis (Like Tesla wants)
5.) Has all the other stuff that Google does. (Like insert most tech companies)
The big thing that Google lacks is excitement and hype (Look at the comments for all their development showcases). They've lost their veneer, for totally understandable reasons, but that veneer is just dusty, the fundamentals of it are still top notch. They are still poised to dominate in what the current forecasted future looks like. The things that are tripping Google up are relatively easy fixes compared to something like a true tech disadvantage.
I'm not trying to shill despite how shill like this post objectively is. It's just an observation that Google has all the right players and really just needs better coaching. Something that isn't too difficult fix, and something shareholders will get eventually.
On one hand, I agree with you, on the other, as a former Googler I think that "just needs better coaching" is a huge barrier in Google's current corporate culture and environment.
Google as a whole has a long history of not being able to successfully build great products out of great tech. That seems wrong from looking at search, Gmail, Maps*, Docs*, etc., but I think these are cases where a single great insight or innovation so dominated the rest of the product qualities that it made the product successful on it's own (PageRank, AJAX, realtime collaboration). There have been so many other cases where this pattern didn't hold, and even though Google had better tech, it wasn't so much better on one axis as to pull the whole product along with it.
That's the problem I see here. Maybe they have a better model. Can they make it a better product? OpenAI and Anthropic seem to ship faster, with a clearer vision, and more innovation with features around the model. Is their AI hardware acceleration really going to be a game changer if it's only ever available in-house?
I do believe in Waymo, but only because they've been incrementally investing and improving it for 15 years. They need to do that with all products, instead of giving up when they're not an instant hit.
*Maps, Docs, and YouTube were acquired with their key advantages in place, so I wonder how much they even count.
Yeah and even Gemini only seemed to come about because OpenAI forced their hand and gave them a product vision to follow. If OpenAI didn't exist I bet Google would still be fumbling over how to make a product out of transformers.
Even OpenAI wasn’t going to release ChatGPT because the product internally was that it wasn’t that good but with some obvious internal pressure we are where we are at now.
On the topic of better management, I can't believe they haven't replaced Sundar Pichai. Satya Nadella by comparison really seemed to have turned MS around.
Larry Page was making the rounds when all of this AI hype started. He seemed to have a much more aggressive stance, even ruffling feathers about how many hours Google employees should be working to compete in AI. And there is obviously Demis Hassabis who is the most likely contender for a replacement.
I doubt it is an easy position to fill. But Pichai has presided over this lackluster Google. Even if he isn't strictly to blame, I am surprised he hasn't be replaced.
Google (Alphabet's) stock price has generally gone up 200% in the past 5 years. That is the only reason he is there, and that is the only way he is judged.
Yes, that is fair and probably the accurate assessment. A bit like Tim Cook. He may not be innovative but Apple sure has been profitable.
I guess it is easy to view it from my own perspective, one tinged with a hope for invention and innovation. But the market probably loves the financial stability Pichai has brought to the table and doesn't care about the flaws I see.
And I 'm not sure why I have rose tinted glasses for Nadella. I believe MS has been doing well financially (not something I've studied) while also supporting things I believe are valuable (e.g. VS Code, GitHub, TypeScript). Maybe I just wish I felt the same kind of balance in Google.
I just saw an interview w/ Nadella where he said straight up: Open Source takes half of every market, and this will happen with AI.
That’s such a refreshing change from the “DIE OPEN SOURCE DIE” attitude that Gates/Ballmer had.
I also love GitHub, TypeScript, and VSCode. These have become the foundation of my development toolset. That was something Gates did well, and Ballmer gave lip service to (“developers! developers!”) but for me only recently has Microsoft actually been maintaining good quality developer tools again.
That’s where my goodwill comes from anyway.
Google makes a better Office Suite (Gmail, Docs, Maps), ironically. But it’s hard for me to get too excited about that. It’s been pretty stagnant for 10 years.
Imo this is just Tim Cook’s public image. By all accounts, comparing Sundar to him is just not fair.
Just off the top of my head, under Tim Cook the company managed to:
* Propel smartwatches as a brand new product category into the mainstream and be the leader in that category.
* Propel AirPods as a brand new product category into the mainstream (and be the leader in that category as well).
* Smoothly transition to ARM (aka Apple Silicon) with great success.
* Various behind the scenes logistical/supply-chain achievements (which makes sense, as Tim Cook is the logistics/supply-chain guy by specialization).
None of those things were simple or uncontroversial. In fact, I remember the pushback people and the press had against smartwatches and airpods, calling Apple washed out and Tim Cook a bean-counter. And these are just the largest examples off the top of my head, there are definitely more. However, Google doesn’t seem to have even a singular product win of such magnitude in the past 10 years.
In the meantime, what did Google do productwise? Catching up on the cloud compute game to AWS (while nearly killing it due to their PR nightmare announcements during 2019-2020 iirc), killing their chat app that finally managed to gain enough mainstream traction (Hangouts) and then rebranding/recreating it at least twice since then, redoing their payments app multiple times (gWallet vs gPay vs whatever else there was that I forgot), etc.
I am trying to be generous here, and of course Apple had their misses too (the butterfly keyboard on 2016-2019 intel macbooks, homepod is kinda up in the air as a product category, mac pro stagnating, etc.). But I legitimately cannot think of a single consumer product that Google knocked out of the park or any that wowed me.
This sucks, because I know for a fact it has nothing to do with their engineers lacking the skill to execute on a new innovative product (as evident by Google being early to the AI/transformers era and being fundamental to what is happening with AI right now). Google has all the technical prerequisites to succeed. But the product and organizational strategies there are by far the most cartoonishly bad I’ve ever seen for such a company.
I don’t want to blame it on Sundar, because I cannot say for sure that the root of this dysfunction is at his level. I just know it is on some level between org directors and Sundar, but not where exactly. I just know that killing off a whole org working on a truly innovative AR org/product, only for most of those people to switch to Meta and continue working on an improved version of the exact same thing (the Orion glasses) wasn’t the move. And I just know that having 5+ major reorgs in one year for a single team is not normal or good.
TLDR: apologies for the long rant, but the short version is that Google under Sundar has absolutely zero sense for internal organization management or delivering products to consumers. And comparing him to Tim Cook (who has been the CEO through the AirPods/Apple Watch/ARM macbooks era) is unfair to Tim Cook and is based purely on the public image.
Because we are talking about what product wins they had. Apple Car was never officially announced, and Vision Pro is clearly their experimental/devkit sort of a product.
Vision Pro might succeed or fail, and that’s fine. I tried it, and it is clearly a significant step towards the future, but I am not sure of it becoming a successful product at its current price point and in its current state.
I am not judging CEOs or companies negatively for taking ambitious product bets and not always striking gold on those bets. I am judging them negatively for not having any product wins and not taking any ambitious product bets.
Exactly. If the founders (who still have majority voting control) or board wanted an innovator they wouldn't have picked Sundar in the first place. His job is bean counting and increasing profits, and he is doing that brilliantly.
But why does that matter to Google? They'll never need to issue more stock to raise cash; last year they had $200 billion in gross profit, money they literally didn't find a reason to spend.
Imagine being so replete with cash that after paying all your costs, all your salaries, all your R&D - you still can't find a way to spend 200 billion, so you threw a chunk of it away as tax and put the rest in the bank.
The price of a share should be utterly irrelevant to them.
Take chat, one of Google's biggest fumbles. They had a good thing with Gtalk. Really screwed things up with Hangouts (thanks, Vic!), added the weird Allo to the mix, almost turned things around, and then brought in Chat to compete with Slack as opposed to AIM...WhatsApp.
If they had just incrementally invested in chat, even if they swapped out back ends, they could have kept most of their user base, maybe even have grown it. Gchat was pretty popular, even during the rise of Facebook Messenger.
But they screwed around with the public-visible product side of things too much, and revealed their tech stack and org chart as product changes. There was no product-first, continuity-oriented planning.
The main problem with chat is that there are too many angles to communication, making it impossible to fulfil all requirements with a single tool. Apple does IM, period, they don’t want any of the Slack-type team communications and that's fine for them. Even Facebook realised that having multiple chat apps is fine as long as they offer value on their own. Meanwhile, Google has gone through several iterations, with internal groups competing for the top spot in defining what a chat app should be, but ultimately falling short because there's no single chat app for all requirements. They aimed too close to the average and failed to deliver anything useful enough for any specific group.
Or we need to break it up. The ai search team should not be afraid of killing the traditional search engine.
Many of the decisions companies make are to ensure the cow they are currently milking very efficiently does not die. This is bad for the rest of us, specially if they place barriers to innovation.
You couldn't break up the AI search engine and the traditional search engine. They're basically one and the same. The AI search engine relies on the index. The index uses AI in various places. The "traditional" side has long used AI for query understanding, ranking, and fact extraction.
Legislators don’t (and should not) care about your implementation. The old company will be banned from using ai for their search for x years the new company will get employees and assets including source code to startup the new entity.
Waymo clearly stands out as an exception amongst all moonshots that Google went after. However, they don't seem to have that one axis advantage in Waymo. I can't believe they didn't double, triple down on their efforts to build a fully integrated car. Compared to Apple, they were at a much better position to do this because of all the underlying tech/models and research.
May be that's the problem - that there is no one rallying individual for Waymo. They should just spin it off and make it an independent private company and retain % ownership.
I somehow feel Google will be way better if it's run like Berkshire, the CEO just focuses on capital allocation and let's the managers do their jobs in their respective companies - YT, Waymo, search, cloud, deepmind.
I'm not sure that culture can dissipate in Google at this juncture.
Only disagree with the last part of your footnote. YouTube was acquired with an underpants gnomes' business model: spend $$$$ on network traffic; ????; profit! The "key advantage" that enabled YouTube was dirt-cheap global networking. And I think that is the thread that ties together all of Google's products. They are the protobuf moving company, first and foremost. Even on AI one of their key advantages is the ability to reliably and rapidly start training, literally they have blogged about their cutting-edge protobuf tsunami capabilities.
This is a bad take. The business model is pretty clear: subsidized new line of business using the search revenu until it is so dominant that no competition is viable, only then heavily monetize it.
Google needs to be broken up. The DOJ / FTC want to do it.
There's far too much value and scale in the company and they can't even focus their energies appropriately.
YouTube is the most valuable media property in the world. As a standalone company, it would still outperform Netflix on the basis of ads alone.
The monopolistic stuff Google is pulling off with Chrome/Android/Search is unfathomably market distorting, so those business units alone could/should be pulled apart. The tech sector would probably be better off if YouTube, Waymo, and GCP/AI efforts were similarly split up.
As a consumer I don't have any great desire to see it broken up. Youtube has worked well for me for years. If they spun it off it would probably get way more aggressive in trying to extract money and sell data.
Maybe, but IMO the DOJ's current proposal would be harmful for users and the web. Chrome is not worth as much to anyone else what it is to Google. And with Google barred from paying for default search engine placement, all browser investment everywhere will be severely cut back. Mozilla will probably finally fall, Safari will stagnate, and Chrome will rot.
Apple would no longer get $20 billion from Google for default search engine placement. Microsoft... and DDG or Yandex? might pay some, but nothing like that with the biggest bidder off the table. Safari funding would _definitely_ take a huge hit.
I don't think we know how much google pays for it right now. That 20B figure is from 2022. Also, that payment is mainly for iOS's Safari. Google would still pay Apple for search engine placement on iOS even if Apple stopped updating Safari today. What I'm poorly trying to say: I don't think safari development funding related to how much it brings in.
Also there is MS that wants to pay for search engine placement and it's fact.
> *Maps, Docs, and YouTube were acquired with their key advantages in place.
I don’t think the same logic applies to Google Docs as it does to YouTube. The original companies behind Docs, Sheets, and Slides were practically unknown, and Google deserves credit for their evolution, features, and clear vision. Developing an office suite might be “easier” from a vision standpoint since the category already exists, whereas marketing something like Gemini Robotics is an entirely different challenge. Just my two cents.
I think you might be on to something. I heard Google Gemini has a best in class system for depicting historical figures accurately, it is extraordinarily unphased by “modern audience” political bias.
Their AI strategy is just baffling. It lacks direction and vision.
They have a thinking model way back ago, which is pretty good with clean CoT and good performance close to R1. But it never gets any marketing whatever.
Veo2 has really good performance too, yet it is so slow in its rollout now Chinese competitors are getting all attentions because it is just easier to access.
It feels to me that Google is reliving its experience with messengers where you they have multiple competing roadmaps from different parties. The execution is disoriented and slow.
They will have to catch up in 2025, the fact grok is this good in one year is a wake up call to everyone, especially Google.
If they failed to do so, Gemini is going nowhere, it already has no tractions outside of Google, nobody’s first instinct when it comes to AI is Gemini
The Transformer LLM came from Google's NLP research and input method(phone keyboard) development. Prompt processing and next word prediction is exactly what CJK keyboard software always did for past 30+ years, only datacenter sized now.
Doesn't ring a bell that very few, if any, of "AGI achieved" people seem to have backgrounds with or exposures to either classical NLP, or Google, and/or cultures that make heavy use of IME? To me the situation looked like that Googlers "have seen that trick" previously, and are doing bare minimum to defend the company from losing presence in this AGI hype storm.
I think its 2 things, but Google is big and slow but also they do not need to monetize the models like OAI. If they believe models get commoditized (Meta's plan), heavy investment is wasteful. AI summaries keeping Search strong and people using the Google bar instead of chatgpt is probably their priority.
They have Gemini and rolled out AI in Workspace and I believe they still have the most capability million token model
I don’t think it is do not need to, it is mainly they can’t at this moment. None of their LLMs are better than competitors, then it is not monetizable.
ChatGPT is already top 5 websites people visit, it is behind Google, but it will eat into its business very soon. That will happen regardless.
> Their AI strategy is just baffling. It lacks direction and vision
It's an artifact of their size -- no large corporation has vision or direction. Best they can aspire to is "stay the course". It's just something that inevitably happens as companies grow and age.
Sounds like Xerox, they had cutting edge everything in the 70s, did nothing with it. Or AT&T, with Bell Labs inventing Unix. Or Kodak inventing the portable digital camera in 1975.
I’ve seen too much inaccurate info from AI to have any trust in it. From declaring the Eiffel Tower the world’s largest Ferris wheel to claiming that hippos can be trained to perform complex medical procedures, it all seems a hot mess.
You might say, yeah, but I can spot those mistakes, but can you really? I showed my fifth-grade son the result of asking if hippos were intelligent and the absurdity of the answer didn’t leap out at him. Now, consider something that’s more subtly wrong like an invented precedent in an AI-generated legal brief or a non-existent citation or citation that doesn’t support the claim and it’s all a disaster.
If you connect ChatGPT to a traditional search engine, it will suffer much less such issues. It essentially digests 100 webpages for you, then render it in a single answer.
For sure, hallucinations will always be there, but I don't think it will hinder its take over, the usage trumps its shortcomings
Yesterday I tried asking ChatGPT "Can an Amazon L6 software engineer afford a house in [location]", without explicitly using the search mode. It went to levels.fyi to look up salary and redfin to look up housing price (exactly how I would have done it myself), and gave me a reasonable answer that agrees with my own analysis, and is definitely much faster than clicking things around myself.
I used to think that the multidirectional aspect of GPT would be a killer feature. But really it's too flaky which remove the initial alleged value. And then results are too artificial or wildly too "imaginary", even asking to compile a list of books on a medical topic you'd get half false titles. Sadly.
really? just unsubscribed OpenAI today, was one of the first to subscribe, now it lost all its edge to me, so many options elsewhere, paid or free to use.
OpenAI is fading away fast. Plus all major leaders left, Microsoft is leaving too, I don't feel its future is promising anymore.
That's fair. I would argue that OpenAI capitalized on transformer tech in a way that Google was late to do, but we shall see if Google will adapt faster than Xerox could
As anecdata, I would offer that the conversations I've had with ChatGPT over these couple of years have been incredible for me. Even just for relieving loneliness, it's been worth the monthly subscription a few times over.
Maybe the company and their business model are doomed to fail, but I'm grateful for what they enabled so far.
that's true, there are just many options these days and I think OpenAI was not keeping its team together and innovating fast enough. the first-move advantage is disappearing quickly.
I agree with you, but even though OpenAI is much lower in my esteem than Google, I would give OpenAI slightly better scores in general on productization. In the last day I have played with Gemini functionality (see https://ai.google.dev/gemini-api/docs) that I have not tried before, and I also played with OpenAI's just released openai-agents-python library. OpenAI's examples seemed a little easier to play with; that said Gemini product manager Jason Stephen reached out to me yesterday on social media in a very helpful way after I commented on Gemini's code execution sandbox.
On other similar products like Google's NotebookLLM and Open AI's GPT 4.5 Research Mode: both products are awesome.
I still maintain the reason they're playing catch-up with everyone else wrt. LLMs is because their Gemini models were not available in the EU until recently. Back when they were doing their releases, years ago, like everyone else here I took one look, saw the "not available in your country" banner, and stopped caring at all.
That's because normal people are supposed to use the Gemini chat interface, which has access to the same image generation model as ImageFX, and I'd imagine video is coming.
Google had really great products, that almost everyone I knew used, then they scrapped them for new shiny thing that competed. The one that angers me most is Google Talk, it used to work with any XMPP client, until it did not, and now its long since dead. They made their own version of tinychat (hangouts) and then mostly killed that too.
Obligatory overview of things Google has killed, because its easy to forget some of the gems:
I think if they make a product, they should support it long-term (within reason of course). Hangouts was great, for example. It could do SMS, voice and video calls, and regular web-based text chat. It was everything you need from a messaging client, all in one app. It was so close to being a real iMessage/FaceTime competitor, but instead they killed it and launched Allo/Duo instead, which was an incredibly baffling decision.
Sure it could've used a bit of a facelift and some other tweaks, but they have a history of launching new, half-baked products instead of just maintaining the existing ones.
I think GTalk being spun off into its own thing might have seen Google Talk succeed beyond whatever Hangouts became. Google Talk had a native client plus it had native clients that supported its protocol.
I even messaged from my GTalk to my Facebook as a test, which worked because both were Jabber. Both companies closed both services off to anyone else. Sadly.
I disagree. As a former googler, that company has never had a problem creating IP.
It has a problem executing on that tech to create great products. It has a real problem with canning any project that doesn't have a billion users within a year.
Honestly they fail to understand how lucky they got with doubleclick and culturally the entire project evaluation criteria is based around the assumption that they can do another computer science rain dance to make it rain ads-level cash.
This is interesting because I think the opposite. What is amazing about Google seems to be their incredible ability to squander their lead in absolutely every area.
Maps used to be the absolute best and now I frequently get baffling driving directions in a US major metro area. No improvements within the last 10 years. New pixel phones are worse than latest Samsung. Some huge lead in AI absolutely totaled, their investment in anthropic their only hope. Inference HW accelerators that noone uses.
They are becoming like M$ - I expect M$ to be this terrible at product development - but at least M$ is fantastic at making money despite terrible products.
Google has allowed search experience to slide so much people would rather use some slow-ass unreliable chatbot. Are they really losing the war on SEO or have they decided that the internet-of-shit (i.e. affiliate marketing) is more valuable?
Maps are still pretty good. I use street view and the reviews and opening hours a lot. Which competitor can I use for that? I think the driving directions may have got messed up by merging with Waze.
Yes, the reviews are still very good, but I think this is more due to users (as a 6-point local guide myself) and less due to google.
I am seeing bot-generated reviews more and more often, and when I look at what happened to search, I don't have a lot of faith in google to do a better job with maps. But I sure hope they do, because I'm with you - I really do rely on maps reviews.
Google make almost all their money from search, an extremely lucrative property, which is under threat from all the new ai players.
So while they have a bunch of cool tech on the possibility horizon the only thing the market cares about is the ability to make money and there's some uncertainty on that front.
Agreed. Google isn't aggressive enough to productize many of their ideas and their existing products feel like they're developed by N different companies with no unified experience.
My experience there was that good tech was held back by an inability to have a consistent long term vision. My and many of my friends were on lots of projects that would get abruptly "reprioritized", often after yet another re-org. I'm not knowledgeable enough to know what the solution is but it didn't give me confidence in their ability to execute on a long term vision, it was very demoralizing and my work ended up feeling sorta pointless (which having talked to someone recently about the state of the projects I worked on it sorta was pointless). Though that being said it's a big company so it's very possible that other orgs will execute more effectively.
It hired a project manager to be the CEO, who has zero charisma comparing to other big companies(Tesla, Nvidia, Microsoft, OpenAI,Oracle,AMD, Apple, etc), that made the company "boring"
I think all those are basically true, but I still don’t see them actually dominating any space besides their “gross monopolist” categories - ads and their dominant Chrome and Android that enhances those ads. In everything else (look at GCP) they’re performing worse than their products merit.
I think what keeps Google up at night is knowing that their ads business which pays all of the bills could be upended by regulation or by disruptive consumer AI of some kind and they’d then have approximately nothing in terms of revenue.
They have due to circumstances a different business model to OpenAI, Claude, Grok etc.
Open-Claude-Grok: "our AI is so cool, AGI next year" but we are losing money so invest in us at a $crazy bn valuation
Google: We are swimming in money from ads so no need to hype anything. If anything saying we will dominate AI as well as search, email, video, ads, browsers, phones etc would just get us broken up. So advance quietly.
Agree. A majority of people on HN are in a startup mood so they feel a company should market aggressively to attract investments and expand. But I don't think Google would achieve more than marginal gain were they to aggressively make Gemini/Imagen/Veo available to Search/YouTube/Workspace users, and the cost could be terribly high.
Gemini has been one of the most cost-efficient models. Probably this is exactly what Google needs for productization.
And I think this is the problem. They have all the necessary pieces and are not yet very successful at stitching them together. Google has a very strong foundation and execution skills but failed to effectively govern it.
Not sure if this is "vision" or "management" or whatever, it feels like that they're just self shackling in every single possible direction. There are something like 50 different teams involved at a major launch and they make some process/infra requirement/review/integration or whatever, from good will. Imagine how much time, effort and compromises you would need to appease all of them.
I think the recent memo from Sergey shows that the leadership finally acknowledges this problem at heart. But solving it is a different story of course. But a long time disconnection between IC, managements and leadership has been the culprit of this problem and at least some awareness might not hurt.
I think they hired the wrong people for too long. At least this is my impression. (no, I did not apply).
Based on P/E the US stock market is overvalued. So I would be careful with "undervaluation". Most undervalued tech stocks are probably in China.
Google also lost a lot to LLM. I use perplexity now 50% of the time, where I would have used Google. I also read a lot of "degoogeling" and "going off Amazon". My impressions of both companies are not the best. I have a gmail account I never got access back, even with the right password. And Amazon defrauded me of 40 USD. Claimed in a chat that they would reimburse express shipment after they f. up but then did not and called it a "misunderstanding".
I have somewhere list of the most valuable companies. And it changed every decade. So, past performance is not a guarantee for future performance :-)
The Chinese stock market is still a crapshoot, so even if stocks are undervalued, if you don't have inside information you can't make much money beyond trying to ride the waves of those who do. So the undervaluing makes sense to a degree (the stock market can't operate very efficiently).
Chinese tech ETFs haven’t done very well, basically as anemic as emerging market funds are now (which are heavy into Chinese tech companies anyways). You aren’t making money with these right now, which might mean they are undervalued, but they seem to go boom the bust too quickly to be long term holds.
Well, they are of performing well, this means they might be bad or they might be undervalued. It was asked, what is undervalued? Not what did perform well (and might be overvalued).
Bust is unlikely with an ETF. They rebalance without you having to do anything. Most tech might come from China in the future.
It is at the same price it was at in 2019. You can't rebalance them because the techs all boom and bust together, there isn't any point. Still, if you think Chinese techs are going to take off big soon, now is a great time to get in (or at least as an emerging market hedge).
Names stick, it’s as simple as that. In most practical situations (such as this discussion), the distinction between Google and Alphabet doesn’t matter.
I once tried to rebrand an in-house, purely dev facing product. I failed.
>Google is probably the most undervalued tech company there is currently, by far: [reasons]
The only thing you left out of this analysis is their valuation. The market values Google at $2.05T (just over $2,000,000,000,000) which is 21 times their earnings (net profit). They are valued at $250 per person on Earth while selling, annually, $43.75 per person on Earth (sales) of which $12 per person is their profit.
How much would you pay to own a golden goose laying $12 in gold per year? Like, $250? If so you are the proud buyer of Google right now. (There is a buyer on every sale of every stock and this is the price they are paying right now.)
An alternative viewpoint is the consideration of the P/E of all of the Mag 7. These numbers might be slightly off since there's been a lot of market movement lately, but...
Apple (AAPL): 34.07
Microsoft (MSFT): 35.07
Amazon (AMZN): 36.69
Alphabet (GOOGL): 21.82
Meta Platforms (META): 24.49
Nvidia (NVDA): 41.33
Tesla (TSLA): 87.87
from this perspective Google, and to a lesser extent Meta, stand out as being valued quite conservatively.
Do I think Microsoft is performing 50% better than Google? Not really, no.
If the goose is likely to live for significantly longer than 20 years and has potential to lay $15 or $20 in the future then yes I'd probably buy that goose for $250. Of course there's risk with it (eg. Google might significantly lose business to competitors) but that's why you diversify. A PE of 20 for a mature company like Google isn't crazy. Even Coca Cola has a high PE at 28.
Google has massive technological assets, but as an organization it has shown repeatedly that it is completely unable to leverage pretty much any of it as a viable business.
On the tech side they are excellent, but on the management/business/corporate culture side they have repeatedly proven that they are much less competent than pretty much everyone else.
Fortunately for them, they have a very prolific cow to milk with their ads business, and that's where they get their valuation from, but there tech is legitimately undervalued because they have repeatedly shown that they don't know how to convert that into business.
First of all if you are going to talk about valuation then that should be included here. And Google has always been terrible at developing and managing products. The list is too long to begin writing down. One funny example is the Pixel. I had a meeting with a slew of Google managers regarding mobile strategy (maps, reservations) and every single one of them had an iPhone. I doubt any of them ever even tried a Pixel. Same with the dozens (hundreds?) of software products that have died off or languished over the past 20 years.
This is all true, but at the end of the day, the shareholders care about return on value, and they get that from selling ads. All this amazing tech doesn't generate any revenue.
People said the same thing about Bell Labs and they were profoundly wrong.
There is nuance. Saying A about B and being wrong does not imply saying A about C means you're wrong. It is indeed possible to lose focus on revenue and die. But it is also possible to focus too much on revenue and die. It is unclear if Google will achieve anything from it's "pure research" investments, but certainly they have room to try, and I personally am glad they are doing so.
> People said the same thing about Bell Labs and they were profoundly wrong.
They were profoundly wrong, but not about Bell Labs' ability to create value from their research. That, they were absolutely dead-on about. AT&T and Bell Labs were absolutely awful at reading the room about what their technology could do and how it could be monetized.
Some of that was just packaging things the right way, and some of it - like charging absolutely insane license fees for UNIX in the 80s and 90s during the beginnings of the personal computing revolution - was because of lazy execs who didn't want to really put in any effort. Either way, I'm not using a Bell Labs LabsBook Pro to write code for a UNIX OS, and I'm not using Bellgle to search for information. AT&T ultimately thought the best way to create value from Bell Labs was to sell that division.
We're in a long, hot AI summer, but we've had winters too. Who knows which hemisphere they're in at Google right now.
I think OP is suggesting that because Alphabet purchased Boston Dynamics in 2013, and then sold in 2017, that they were able to take their learnings from the acquisition and integrate it in-house, but haven't shown the world the extent of their capabilities. Potentially supported by the Gemini Robotics announcement highlighting extremely dexterous robots.
It's somewhat debatable based on lack of results that have made it to market.
In addition to the other comment mentioning Boston Dynamics, they are also the employers of a lot of folks that were formerly at the Open Source Robotics Foundation(?) (OSRF) (it's more complicated than that) which is behind the ROS1/ROS2 framework that are widely (not universally) used; They also have an internal division or whatever, Intrinsic Robotics (or is it Intrinsic AI? too lazy to check). Plenty of smart people that I've met are involved there!
But I remain skeptical of the top level comment's take, given the lack of any robotics product execution of note by Google for a very long time now.
Discussing with a coworker yesterday, they also pointed out the distinction I'd missed, which is that there are separate robotics groups doing research (Gemini) and applied work (Intrinsic? physicalintelligence.company; these are under the Alphabet or X projects umbrella, I infer? Really haven't paid attention.)
Google is an Engineering company. What they're really bad at, in my opinion, is productizing their technology.
Google Cloud is decent, again in my opinion, because they can more or less copy the product vision from AWS and focus on the technical excellence.
When were you last excited to use a Google product or service?
Part of the problem is also their internal incentives that lead to lot's of products being retired waay too soon, leaving behind a lot of users and hurting their reputation a lot.
Your assumptions are actually not correct. They are behind in many AI areas. Their LLM models for example are not in the same level as the frontier models. The main reason Flash 2.0 is so popular is that it's good enough for most things and is 30 times cheaper from Sonnet 3.7 for example.
They definitely have pricing power and also a large stake in Anthropic, so I'm not worried about them.
Google had a revenue of $348 billion in 2024. For a new product to generate 1% more revenue, it needs to generate $3.48 billion annually.
Even extraordinary products are rarely going to do that. Their AI products could be a huge success, and still not significantly change how valuable the company is.
Following up on the Factorio metaphor from the other thread, the bigger your factory is, the more difficult it is to change it to get to the next organization level needed for long-term success.
This is the biggest cloud looming over Google right now, for sure. The stock will have a lot of interested buyers the moment this issue is resolved and evaluated.
Confusing "having the tech" with "having product-market fit" is huge here. If the company was so undervalued they wouldn't try juicing their search profits at the cost of enshitiffying their product.
> Google lacks is excitement and hype
People(me) used to look up to Google and the projects they had. 80/20 work/project time, moonshot projects, all the google perks, etc. It felt like the place to be. Fast forward 10 years, I just want antitrust to shatter it into smithereens.
> that veneer is just dusty
The problem is systematic, affecting the whole org from top to bottom and especially the top. They either get a new CEO that turns things around or become another IBM.
And yet I worked on a Google X robotics project which was later canceled and doesn’t even appear in this announcement despite those machines notionally going to Google brain for research purposes. They have a very hard time capturing value with any innovations that aren’t ads.
Sounds like Xerox. They have everything, some employees will become multi-billionaires within 10 yrs after they leave the company and create their own startup. But I have zero conviction this corporate moloch will be the one to productize any of it.
Google also has a shit reputation for privacy, a terrible (or worse) reputation for customer safety or resolution of issues, and all of that on top of psychopathic executives.
All of the technology in the world doesn't make up for that.
Imagine working there : you could create the best thing you always dreamed of... but you know they will cover it in ads and violate every ones privacy, and sell it to isreal to kill, then use your hard work to create an AI to replace you and fire you.
1.) Has cutting edge in house AI models (Like OpenAI, Anthropic, Grok, etc.)
2.) Has cutting edge in house AI hardware acceleration (Like Nvidia)
3.) Has (likely) cutting edge robotics (Like Boston Dynamics, Tesla, Figure)
4.) Has industry leading self driving taxis (Like Tesla wants)
5.) Has all the other stuff that Google does. (Like insert most tech companies)
The big thing that Google lacks is excitement and hype (Look at the comments for all their development showcases). They've lost their veneer, for totally understandable reasons, but that veneer is just dusty, the fundamentals of it are still top notch. They are still poised to dominate in what the current forecasted future looks like. The things that are tripping Google up are relatively easy fixes compared to something like a true tech disadvantage.
I'm not trying to shill despite how shill like this post objectively is. It's just an observation that Google has all the right players and really just needs better coaching. Something that isn't too difficult fix, and something shareholders will get eventually.