$GOOGL · The Investor Channel · 2026-10-30

Google is having one of its worst weeks ever.

now see that Google, Tesla and Meta are now the "Great Seven" stocks that are performing negatively this year.

Let's move on to Google. Well, we have a slightly gloomy tone towards Google. That's because Google shares started the week near $320 per share. Google's stock has easily had one of the worst weeks I've ever seen.

The stock fell by more than 12.6% this week as the company announced its earnings.

Now, the stock has fallen 12% in a single day after third-quarter earnings came in below expectations in almost every area. The company lost nearly half a trillion, not half a billion, but half a trillion dollars of its market value in one day. It's the biggest drop in history.

Now, let's delve into the numbers. I mean, look, Google's cloud business, which is what they're spending all this money on, and all the investments that make investors feel a bit nervous, well, I mean it's grown by more than 100% from a revenue perspective. From $15.2 billion to over $30.7 billion.

And look at the profits; they have risen from $3.6 billion to $11.1 billion in operating profits. This pertains only to Google's cloud activity.

I never thought I'd sit here and see the day when we have an activity within Google. If it continues at this rate, we probably don't expect this kind of massive growth. Even if it slows down next year, and even by 2030, we have potential activity at Google that could outperform advertising activity, which is unusual considering it generated $40 in operating income in the last quarter.

Now, here's what Wall Street is completely overlooking. They were worried about Google. We'll look at the cash flows here in a moment. However, what is not noticeable in Google is the accumulation of inventory.

And some of you there are wondering, "Okay, what the hell does Google own from an inventory perspective?" Yes, they have some Pixel phones. They have smoke detectors from Nest.

My guess is that they don't even include these things in their balance sheet from an inventory perspective. Perhaps only a little. They also have Fitbit devices.

Well, in December, they only had $2.4 billion in inventory. Oh my God, guys. By September 30, 2026, what the hell do they have in Google stock worth over $11 billion more than they had in December?

Well, these are Tensor Processing Units (TPUs) that they stockpile in inventory to sell to customers like Anthropic.

Why can't Anthropic buy it now? Well, they need to put their shares up for public subscription. They need some funding. They need those data centers to actually be built. Thus, these units remain in Google's inventory, awaiting use and delivery to customers as we enter next year.

Therefore, this $11 billion will actually be converted into revenue and profits much faster than if they had put it inside data centers and run it by the hour, or by the month, or by the day.

Therefore, I am actually impressed with this move by Google. Short-term pain, some inventory build-up, missing some free cash flow figures, and all that stuff.

Wall Street raised half a dozen questions on the conference call related to this business. They don't understand that. They cannot include them in their spreadsheets. They cannot design models for it. They are stubborn.

Ultimately, this will be a great business for Google, and they will surprise everyone with the increase in revenue as we move forward into next year.

Now, what also scares them is a clear cash flow statement. Where we see Meta, Microsoft, Google and Amazon spending a lot of their free cash. In fact, the vast majority of them, and in most cases, are all capital expenditures.

You will see in the last quarter that they generated $42.3 billion in operating cash flow. They spent more than $51 billion. wow. On property, facilities and equipment. During the first nine months of the year, they spent $131 billion on property, facilities and equipment, and generated only, and I say "only," $127 billion.

So, they raised $127 billion in operating cash flow. $131 billion has been withdrawn, and this is making some investors nervous.

However, I would like to remind you that the vast majority of what they spend is on Google Cloud, whose revenues grew by more than 100% in one quarter, and nearly quadrupled its operating income.

I will accept this exchange every day of the week.

Not every investor is capable of doing that. People nearing retirement age, and those who feel some anxiety about the expansion of artificial intelligence, should take a spectator's stance.

But this moment when the market feels nervous will be a cause for celebration 12 to 24 months from now. They considered the drop in prices an early Christmas gift.

These companies are investing in infrastructure that generates revenues and profits that in many cases they have never seen throughout their history. Microsoft is not standing idly by while Amazon, Google, and Meta are raising funds without it taking any action.

The company generated $58 billion in operating cash flow, and I say " only" considering what we've seen at Google, and especially considering what we've seen at Amazon.

Overall, Microsoft's results have been excellent, and it is appreciated by Wall Street for being more financially prudent than Google and Amazon.

Although both companies have an impressive growth rate , they are pushing their limits, so to speak, from an investment perspective. This is certainly what we see at Google.

Over the past year, we have seen Meta, Microsoft, and Google sign deals with emerging cloud providers such as Nebulus, Iran, InScale, and TerraWolf, among many others.

What they can do is secure very profitable graphics processing unit prices, at least at current prices.

I don't think these things are sustainable, but in the short term there are clients like Anthropic and even Google who desperately need them.

Google had one of its worst weeks ever as it gapped sharply below its 200-day moving average. However, it did not get that upward push that we saw at Amazon . That downward gap appeared early in the trading session and then made its way to recovery.

Google , that's interesting. I think there are growing concerns about this company's business model, which we do n't necessarily need to delve into now in presenting the technical aspects, but I think there is a misunderstanding of how the company is able to generate profits from artificial intelligence.

There is a support base right here at the 270 level. You wouldn't want to see a break from 270 to 275. Those were the lows it made here in 2026. It was more like a small pause in 2025.

If Google drops any further, you're in uncharted territory.

However, you have been in decline since the peaks you recorded in 2026 . Lower peaks, and now much lower troughs. You are below all your moving averages. It will now turn negative. It will act as resistance on the way back up.

This graph has become more like Netflix than anything else . Now, as you can see here, companies like Google and Netflix are still below their moving averages, and you have to fight to get past that. You have to make your way with difficulty.