Google after an 80% rally: $402B in sales, $132B in earnings – overhyped or re-rated?

If you look back two or three years, Google was not the centre of the AI debate.

Search was dominant but seen as mature. Cloud was growing but not yet viewed as a serious profit driver. When generative AI tools took off, the market focused on other names first. There was a sense that Google would respond, but it was not leading the narrative.

That changed last year.

Cloud growth accelerated and margins improved. Gemini moved from research into core products. And the biggest concern that AI chat would disrupt search did not show up in the numbers. Search revenue continued to expand.