The market sets prices, and they are set based on multiple things. One of those is fundamentals. Consider the value of assets, whether tangible or intellectual property, human resources, binding contracts, etc. that add up to reasonable revenue forecasts and so forth.
And the other aspect of prices is based on conjecture, speculation, meme-joiners, believing hype, and in some cases, fraud.
The secret sauce is always going to be the one who can figure out, between the two factors going into price, what's right, and when.
BUT... just saying that all stock market pricing is based on unreliable factors? That's not a useful, actionable statement. You can certainly stay out of investing in that market, but is that going to be your best course of action?
And a market cap that exceeded 4.5 trillion dollars. I think we can all agree that Google is a legit business. But they were doing fine in 2023 too and had solid y/y revenue growth for much of their history. Their market cap tripled since 2023 and doubled since mid-2025. So, it's clearly more than "they continue to be a profitable company that grows around 15% y/y in real terms".
That's trailing and mighty impressive. However when you decided to quote Q1 earnings. $62bn of Q1 earnings ends up at only $10bn. The LTM numbers are less relevant.
The discussion here is whether Google can make money in the AI world. They obviously can. Whether they turn around and spend that money on capex to try and increase future earnings is irrelevant.
You're half right.
The market sets prices, and they are set based on multiple things. One of those is fundamentals. Consider the value of assets, whether tangible or intellectual property, human resources, binding contracts, etc. that add up to reasonable revenue forecasts and so forth.
And the other aspect of prices is based on conjecture, speculation, meme-joiners, believing hype, and in some cases, fraud.
The secret sauce is always going to be the one who can figure out, between the two factors going into price, what's right, and when.
BUT... just saying that all stock market pricing is based on unreliable factors? That's not a useful, actionable statement. You can certainly stay out of investing in that market, but is that going to be your best course of action?
I guess Google’s Q1 earnings of $62 billion were just hype.
And a market cap that exceeded 4.5 trillion dollars. I think we can all agree that Google is a legit business. But they were doing fine in 2023 too and had solid y/y revenue growth for much of their history. Their market cap tripled since 2023 and doubled since mid-2025. So, it's clearly more than "they continue to be a profitable company that grows around 15% y/y in real terms".
Yes, earnings are essentially hype/BS.
Focus on cash/cashflow.
$64B trailing twelve months free cash flow. (https://s206.q4cdn.com/479360582/files/doc_financials/2026/q...)
That's trailing and mighty impressive. However when you decided to quote Q1 earnings. $62bn of Q1 earnings ends up at only $10bn. The LTM numbers are less relevant.
AI-related capex is one hell of a drug.
The discussion here is whether Google can make money in the AI world. They obviously can. Whether they turn around and spend that money on capex to try and increase future earnings is irrelevant.