$GOOGL · Schwab Network · 2026-11-06

Google is making some profit today or increasing its profit margin because we see the technology sector turning around today. Yes, whenever we look at Google, it is clearly a huge company, and we can analyze it in a few ways.

I think overall, when we look at Google's demand, that is, cloud , advertising, streaming, Gemini, we have had about 4% year-over-year growth in overall demand. And actually for us, it's not saying that growth is 4 %. This is just a momentum gauge for us.

So our momentum remains upward while the stock is quite stable on a year-over-year basis and is down about 17% in the last month. So there is a bit of a gap here. And when we look at what the main driver of growth is, which is cloud, we saw last quarter Google Cloud revenue grow probably 103% year-over-year , which was pretty impressive.

It has also exceeded expectations, and we are seeing that momentum build.

When we look at the last month, our momentum has increased by almost two points year-over-year. So for us, when we look at it, we see a bit of an opportunity emerging where Google Cloud, whether it's advertising or streaming, whatever sector it is, is one of the leaders.

And any kind of decline, especially such a significant decline, really catches our attention and we look at it as an investment opportunity. Yeah, Megan, you know, it had some issues at the last earnings event as we all know, went down pretty quickly after the earnings.

And the reason for this may be that they are losing part of their core business , that is, their advertising revenue in search. This is 55-56% of their revenue.

Now they have other sources of revenue , but are you getting any information from your side that says agents like ChatGPT, Cloud or their own Gemini are hurting their core business in search? Because this can be a big concern for them.

I'm still an old-fashioned person. I still use Google search, but you know, now you take advantage of the Geminis that come up first and it's not possible to earn as much from it right now.

Are you seeing any data that suggests these agents will become more involved in the core of their business ?

This is definitely something to keep an eye on. When we look specifically at visits to the Google Ads platform , we see that it has decreased slightly year-over-year. So we noticed this pace slowing down.

Google's search ads grew by about 12 % year-over-year in the last quarter, down from 17% in the previous quarter.

This is certainly something to keep an eye on for the future , but looking at the overall health of the company and its ability to make money, I don't think it's a cause for too serious concern.

Our cloud services are growing rapidly and we have other sources of revenue, so we think Google will address this issue , especially as Gemini usage increases. I think the number of Gemini app users exceeded one billion in the last quarter.

So it's still an active audience that they can monetize.

This is definitely something to keep an eye on as agents come to market , but we think Google is quite proactive in this regard. We think they will handle it.

And for us, it's telling that Google Cloud's growth was really strong last quarter. It has more than doubled and we are seeing that momentum being maintained, if not even slightly improved.

Megan, when you look at the whole thing as a whole , whether it's YouTube ads or cloud growth, I think their cloud growth is still great, but it's not a big source of revenue. Overall, when you look at all their data points, overall, I think their stock is still good, even though the share price is down 8.7% this year.

So do you think it's oversold now based on some of the metrics you have ? I think, as you mentioned, there is still some uncertainty in the search area. As we look at spending on many data centers and artificial intelligence (AI) , those questions remain uncertain for the coming year.

Although they may not be the fastest, once they enter a field, they usually excel in it. Think about Gmail, but it wasn't the first email client. Think about Google, but it wasn't the first search engine either.

Google has been able to perfect a lot of things once the field was created and they mastered it, and we think Google definitely has the technical talent to do that in the long term.

So, we are not betting against this company. And when we see such a decline in prices, we think about buying shares. Megan, let me ask you a question. When you look at the data points you see , whether it's your cloud visit chart or the growth in consumer traffic, which one would you place more importance on given the data you're tracking ?

Moving forward, especially as Tom mentioned their recent earnings report, when you're looking for a catalyst or a pattern from here , what would you focus on ? I think it's hard to say, because the market has become accustomed to Google's cloud performance and they expect Google to always do well.

So, if there is any change there , I think it will have a negative impact. We do n't see it yet. I think demand is increasing a bit , which is very significant. You will see a big jump last year and it continues to increase.

So, it's really important at our consumer level that we see consumers and businesses turning to Google at an increasing rate.

So, you understand, it's hard to say. I think we think it's great that both are going in the same direction for now. But if we see cracks in either of them, it will be worrisome for us.