Investing Simplified - Professor G on $GOOGL (Nov 5, 2026)

Alphabet's stock fell by about 10% overnight after announcing its earnings,

Now, the next company is the one into which Berkshire injected $10 billion last June.

Okay, let's move on to the second number on this list. This is Alphabet, or Google, whose stock is trading around $290 as I record this video, after dropping about 10% following its October 28 earnings report.

This represents a 7% drop this year, 14% last month, and 27% below its record high of $399 in May. But what's really interesting is that Google's business is actually doing very well.

Revenue jumped 25% to $127.6 billion. Google Cloud has more than doubled in size, growing by 103% to reach $30.7 billion. With a massive backlog of applications worth $561 billion, the search industry continued to grow at 12%.

Gemini has surpassed one billion users and operating margins remain strong at 32%. So why did the stock price drop? Spending. Alphabet spent nearly $51 billion on AI infrastructure in just 3 months, with plans to spend between $195 billion and $205 billion this year, and more in 2027.

This pushed quarterly free cash flow to negative $9 billion. The company also raised $12.4 billion through share sales, borrowed $28.7 billion, and stopped share buybacks. Revenues and profits also came in below expectations.

Analysts were extremely optimistic ahead of the earnings announcement, with average price targets of around $420 to $430, about 45% higher than today's price. Morning Star estimated the fair value at $433, but those estimates were made before this latest report.

So, here's the big picture. Cloud revenues have doubled, but capital spending has more than doubled as well. Investors are wondering when all this spending on artificial intelligence will actually pay off.

So, what is my next step in this matter? I will double my investment. I have already doubled my investment. The night before the drop, I told my study group that I was going to buy, and the next day when the market opened, I doubled my position when the price was $280 per share and informed them all immediately after I did so.

I am happy with this purchase and will keep this investment for the long term.

I will double my investment in Alphabet. I think it's the best- rated company on this list, as it's about 27% lower than its highest level after earnings, and I'll be adding it gradually.