GOOGL
💰 Google’s planned $75 billion capex spending for 2025 signals strong confidence in future returns, expecting around a 20% compounded annual return on this massive investment.
📈 Despite potential vulnerability in its global advertising business if advertisers pull back, Google’s Cloud division shows spectacular growth, providing diversification.
🤔 Trading at potentially 18 times earnings, the valuation might present an attractive entry point given its long-term investment strategy and growth prospects.
@bernardodegarcia:
“Sometimes, like Google announcing $75 billion dollars of capex spending for 2025, one rejoices, or the market says, ‘Wow, it’s going to be quite happy.’ Why? Because Google, a powerhouse company as it is, not just any small business, says, ‘Well, I invest $75 billion today because I expect to get a return of at least, imagine, 20% on this capital.’ This $75 billion dollars will give me 20% each year and will compound it. This translates into more patents, better products, and ultimately more market share for companies. Why has Google fallen so much? Google might be a bit more certain because Google operates globally with ads and YouTube, and if advertisers don’t place ads and so on, then obviously, it affects things, similar to Meta. But well, Google has cloud, which is growing spectacularly and so on. Seeing Google trading at 18 times earnings, I don’t know. How long will this last? Well, God will tell.”
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