"For the past two years the market has treated Google like a simple advertising company whose search business is threatened by the new age of answer engines. But I think Google is the most underpriced major player in artificial intelligence. And this week, so does Wall Street -Alphabet stock is up 5 percent today, and leading a market rally. That's followed by the news-which broke last week-that Warren Buffett's Berkshire Hathaway has acquired a $4.3 billion stake in Alphabet."
"Here is Buffett's simple math: Google earns about ten dollars and fourteen cents per share. At a 28 price to earnings ratio that implies a value of about two hundred eighty four dollars per share. If Google simply trades at the same multiple as Apple and Microsoft... about 35x... the stock would be worth about three hundred fifty five dollars per share. That is a twenty five percent move with zero revenue growth, zero new products, and zero heroics."
Google has been treated like a simple advertising company despite strong AI capabilities. Alphabet stock rose after Berkshire Hathaway acquired a $4.3 billion stake. A valuation gap exists: Google trades at about 28x earnings versus Apple and Microsoft near 35x, implying a roughly 25% upside without additional growth. Google avoided an AI bubble markup while maintaining strength across AI categories. The Gemini model is regarded as one of the best and trained on Google's own processors. Google designs and produces its own silicon optimized for its workloads. Institutional investors are attracted to the apparent inefficiency and AI positioning.
Read at Inc
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