$GOOGL · Financial Education · 2026-10-28

There is enough money to spend on Nvidia, AMD and even Intel, and certainly companies like Google are in a position to make a lot of profit as well.

And one of the biggest beneficiaries of chips will end up being Google too, won't it? But what I really wanted to focus on was this Google graph here. Because this chart is based on the past twelve months.

It really shows you what's going on with Google, doesn't it? Free cash flow continues to decline. If you look at the quarterly data, the situation is really bad, isn't it? It has become negative now.

But the company's operating cash flow continues to accumulate. And here's where this strange discrepancy occurs with a stock like Google right now, where you say: Well, their operating cash flow is higher than ever.

It's on a continuous rise, isn't it? But ultimately, they spend all they have on property, factories, and equipment.

Now, here's the important point. You want to know if Google stock is a buy. You want to look at something. Of course, we can review all the growth rates. We achieved 25% revenue growth, our cloud computing activity doubled, and profitability more than tripled.

I mean, it's unbelievable, isn't it? But what price are you paying? At 1000x, we have the evaluation over time, right? Google's average historical four-year price-to-earnings ratio is around 23, right?

Now, based on Google's after-hours stock movement and next year's earnings forecast, I would say the stock's forward price-to-earnings ratio is currently around 19, while historically it's around 23, so I can say that this stock was significantly undervalued even before the earnings release.

But now that the results are out and the stock has clearly collapsed, I would say that it is in fact significantly undervalued, and this represents a great buying opportunity.

Personally, I clearly saw the stock price decline and my first thought was: "Oh dear, I should have sold the rest of my shares." But after reviewing the results, I said: "In fact, this stock is a buying opportunity."

It is not for sale. I am grateful to be a shareholder in the company despite the stock's decline. I looked at the numbers across all sectors, and there's no doubt that Google is a stock you'd want to hold.

I view any drop in the stock as a long-term buying opportunity. This does not mean that it cannot fall further in the short term. You must understand the nature of big technology stocks; this stock has fallen by about 30% from its highest levels.

It could decrease by 40 or 50%. Nobody knows, does he? With this type of stock. Therefore, it is something to keep in mind.

I'm not saying Google will drop by 70%, but it should be recognized that drops of 30, 40 or 50% are possible even for these giant tech companies. This happens. In fact, it happens all the time.

It even happened to Google just a few years ago. Therefore, this is something that must be taken into consideration. However, this stock is definitely a buying opportunity.