Google can turn its distribution, AI adoption, and proprietary compute into durable growth, with Cloud and AI monetization offsetting Search disruption.
AI-driven Search substitution risks eroding high-margin economics before new monetization and Cloud profits can compensate, while investment demands add execution and valuation risk.
The stock lagged behind other internet companies.
OpenAI's internal data suggests ChatGPT search volume is already about a fifth of Google's, with activity accelerating, posing a competitive threat.
BNP maintains an Outperform rating and a $410 price target, arguing that Search engagement is strengthening despite a 3Q monetization miss, with Google app DAUs and time spent significantly increasing.
BNP estimates that approximately 41% of Search users are utilizing AI Mode, which is significantly more than ChatGPT's user base, and multi-turn ads in AI Mode and more ads in AI Overviews could start contributing to revenue as early as 4Q.
Wells Fargo maintains an Overweight rating but cuts its price target to $365 from $371, arguing that Search softness reflects AI Overview penetration, now at approximately 82% of queries, rather than weaker engagement or agent displacement.
Paid clicks per session are highly inversely correlated with AI Overview adoption, leading Wells to cut Search growth forecasts for 4Q26, 1Q27, and 2Q27.
Near-term Search growth may remain lumpy as AI Mode cannibalizes some traditional queries.
The multi-turn nature of AI Mode may lead to higher query volume per user, and the company could potentially monetize this traffic effectively if it successfully integrates targeted advertising using its extensive user data.
The table shows that while GOOGL has a significantly higher headcount, META consistently demonstrates higher LTM Adj.
Headless. The biggest strategic shift: NOW is openly charging for headless access. Action Fabric opens NOW workflows to third-party front ends via MCP/A2A. That now includes a ChatGPT plugin under the expanded OpenAI partnership and deeper GOOGL Gemini Ente...
The company delivered a poor earnings report across key performance indicators including search, cloud, and EBIT, while facing structural concerns that AI-driven search features are cannibalizing traditional, higher-monetized search queries.
Operating expenses and headcount growth are excessive, and the company lacks transparency regarding the profitability of its TPU and AI-related investments.
Outside of earnings, Semis -2.2% with some pointing to the lower than expected headline capex #s from GOOGL/MSFT although q-specific reasons for each of those.
META +1% getting some love after the GOOGL miss. Neoclouds lower with NBIS -7% as some speculating the MSFT 3p capacity delay is them.
Another busy night tonight with AMZN the big one. We dive into GOOGL, MSFT, KLAC, FTNT, and NOW below, then the usual.
The company's AI chips are being sought by OpenAI, indicating strong demand and validation for Google's AI hardware capabilities.
The company launched Genie 4, a new AI model that allows users to create explorable worlds from text prompts with keyboard controls, capable of running simulations up to two minutes and generating synchronized sound and images.
The buyside is still leaning short on the stock ahead of earnings, with tactical shorts driven by third-party data, comparisons, and relative risk/reward.
Search bogey expectations are lower than Street estimates, with feedback suggesting they are closer to 13-14% compared to the Street's 14.7%.
Implied volatility for the stock has crushed to one-year lows.
Macro conditions were modestly softer late in Q3, and AI spend optimization is continuing.
RBLX +16bps (dipped as much as -3.4% midday)/ TTWO -1% / U -50bps as GOOGL launched Genie 4, which lets users create explorable worlds from text prompts and navigate them with keyboard controls. Previous release cratered video game stocks and U, but seemed...
TTWO -1% on GOOGL’s world model; BofA lowered FY28 EPS but argues GTA Online monetization can sustain ~15% LT EPS growth.
The company's CSP marketplace, Vertex, is a significant channel for Anthropic's revenue, indicating a strong partnership in the AI ecosystem.
Upcoming earnings reports from hyperscalers, including Google, are expected to provide positive insights into October trends, suggesting a favorable outlook.
In macro land, rates flat into Wednesday’s FOMC: 10Y -1bp to ~4.98% and 2Y +2bps to ~4.71% after a soft $69B 2Y auction. ~91% odds of a hold Wednesday, the same afternoon GOOGL and MSFT report, with the market looking for hikes to resume in December. Crude...
Advertising slowed exiting September and into October.
The stock declined due to weaker third-party checks, with M-sci observing a slowdown in advertising exiting September into October.
LITE: Jefferies raises PT to $1,250 as GOOGL OCS share + 1.6T ramp drive major estimate upside
Jefferies raises 2027 rev/EPS ~12%/~8%, expecting LITE to become GOOGL’s largest OCS supplier next year as external sourcing accelerates, with a path to ~$1.5B OCS revenue in C27 and $3.5B+ in C28. 1.6T should surpass 800G by the March quarter and improve t...
Mizuho remains positive on the company's TPUs.
The company's stock declined on mixed checks from Cleveland.
The company's stock declined due to Cleveland's checks indicating slower Q3 trends at quarter-end, mixed retail performance, softer ROI, and a lower 2027 ad outlook due to reduced enthusiasm for LLM monetization.
Mizuho cut its multiple on the stock due to search risk, highlighting concerns about the company's overall valuation if search revenue decelerates.
A mix shift from search to cloud faces an uphill battle because search is the majority of profits and carries much higher margins than cloud.
Semis +2.2% outperformed as SPCX’s guide, SMCI’s preannouncement, and some bullish Anthropic comments by Gerstner on CNBC had semi vibes feeling better than they have been over the past couple weeks. Software +1.8% was led by cyber on an AI-found PHP flaw (...
META is seeking another ~6.5GW by YE28, ORCL has resumed leasing with NVDA credit support which Cowen views as an indication of future RPO growth, and GOOGL/MSFT remain active. The bigger issue is execution: 2027 equipment slots are already oversold, build...
The company's cloud business is expected to perform exceptionally well, with buyside estimates around 105-115% growth.
OJ here: backing out large customers and distillation from the disclosures, OJ gets only ~$5.5B of net new ARR in Aug/Sep, which makes the $100-110B year-end target look “completely fanciful,” with maybe ~$120B of FY27 revenue, nowhere near the $190-200B FY...
There are concerns about GCP margins due to the deal with SPCX.
GOOGL -1.5%: Waymo plans to grow from ~4,000 robotaxis to 8,000 by year-end and 20,000 by end-2027 on this month's $5B loan (PIMCO, BX, Sixth Street), adding Madrid next year. Main debate heading into the print is search vs. cloud. 3p checks in the former p...
Cloud growth is accelerating, driven by TPU sales and AI-native workloads, with potential for revenue to significantly exceed consensus estimates.
SemiAnalysis argues 2027 data-center growth is materially underestimated, forecasting ~50GW of new capacity in a single year with >24GW already in advanced construction across just 40 campuses and ~60GW under construction more broadly. The key leading indic...
GOOGL/AMZN: Susquehanna ad checks stay constructive; PTs unchanged
GOOGL PT remains $460, based on ~$211B of 2027 Services EBITDA plus $151B Cloud revenue, while AMZN PT stays $325 with AWS, 1P and 3P all valued toward the upper end of peer multiples given superior growth.
UBS expects another beat/raise with Sep rev/EPS of $1.27B/$2.12 and Dec guide of ~$1.32B/$2.24 vs. Street $1.27B/$2.09. Compute remains the driver: AMZN Trainium 3 shipments are modeled at ~1.8M/~2.8M units in 2026/27, NVDA networking remains strong and GOO...
Google's energy chief stated that its SpaceX compute contract is a short-term bridge for "huge" Gemini Enterprise demand, and Gemini grew from 400M to 1B users in three months, indicating rapid adoption.
Mizuho raised estimates well above Street consensus, modeling 2027/28 revenue of $206B/$301B (vs. $185B/$281B consensus) and TPU revenue of ~$67B/$100B at approximately 14% EBIT margins.
Checks suggest approximately 1GW/3GW of TPU capacity in 2026/27 with line of sight to approximately 10GW in 2028, which could support over $200B of 2028 TPU revenue, roughly double Mizuho's current estimate.
Deutsche Bank was positive, stating that Google Cloud Platform (GCP) is likely to reach over 100% year-over-year growth.
Design changes to the TPU v9 chip could result in shipment delays, potentially impacting the hardware roadmap.
There are concerns around search performance, as third-party data shows in-line expectations, despite better agency checks.
JPM sharply raised Google Cloud estimates, projecting over 100% growth in Q3 and Q4, and over 100% growth in 2027, primarily due to greater TPU sales inclusion, with potential for further upside.
Jefferies stress-tested bear cases and still sees approximately 30% upside, citing strong Cloud/TPU economics and the durability of AI search.
The company's backlog is approximately three times its capex, with over 50% converting within 24 months, indicating strong future revenue generation.
Cloud margins are strong at approximately 36%, and AI server paybacks are less than two years, with TPU payback roughly half that of AMZN.
GCP has accelerated for five consecutive quarters and could gain approximately five points of market share between CY24 and CY26.
Approximately 90% of F100 companies use Gemini Enterprise, demonstrating strong enterprise adoption.
In Search, Googlebot indexes significantly more of the web than MSFT, and AI Overviews/AI Mode each exceed 1 billion monthly active users, supporting ad retention as formats evolve.
GOOGL: JPM raises Cloud estimates sharply on TPU inclusion, sees >100% growth and further upside
Gemini 4 Argon went Generally Available (GA), marking Google's return to having a frontier model released to the public.
Gemini 4 Argon ranks equally to GPT-6 Astra on the ArtificialAnalysis Intelligence Index at 60% of the Cost per Task with discounted prices until November 30.
The model shows substantial improvements in agentic performance and has the lowest hallucination rate among leading models.
The company secured a 20-year Power Purchase Agreement for a 702MW fuel-cell project in Wyoming to power its operations, indicating a long-term commitment to sustainable energy.
LLM providers 17%, GOOGL 5% and AMZN 4%. 30% of CIOs expect MSFT to be the biggest GenAI spend-share gainer vs. 27% last quarter, while Azure budget-share intentions lead at +43% vs.
GFS Securities Jeff Pu pushed out the release of v9 by approximately one quarter.
The company has secured over 5GW of identifiable TPU commitments, largely for 2027, which could generate significant external TPU sales cumulatively through 2028.
Internal testing of the newer Gemini 4 Carbon version shows stronger coding feedback, with one employee comparing its performance favorably to Anthropic’s Opus 5.5.
External TPU sales could lead to Cloud Operating Income (OI) margin dilution in 2027 and 2028.
AI Overviews penetration, exceeding 80% of U.S. desktop queries, is negatively impacting Reddit traffic, leading to cuts in 3Q/4Q US Daily Active Users (DAU) net adds.
META CPM growth accelerated to +47% in September from +33% in August, while GOOGL’s share of AI Mode/Overview citations rose to 21.4%, +290bps m/m/+540bps since April. Ad checks remain strong into 4Q, with NFLX/ROKU/YouTube/RDDT standouts and TTD/SNAP weakest
The introduction of Gemini Agent, a universal enterprise AI agent, strengthens Google's position in enterprise AI automation, potentially boosting Cloud adoption, customer retention, and revenue growth.
The company's distribution and access moat is reinforced by the agent access bottleneck faced by competitors, which could delay their commerce monetization.
META: Jefferies says Muse demand is strong, but agent access bottleneck could delay commerce monetization and benefit GOOGL
GOOGL -63bps gave back a +1.8% morning high after launching Gemini Agent, its universal enterprise agent. Good discussion in Slack here on the detail that it can run on Gemini or Claude models: davy asked whether that’s GOOGL conceding it isn’t at the...
Waymo is seen as an underappreciated agentic differentiator, with new city launches ramping faster than expected.
Waymo's fleet is projected to grow significantly by 2032, contributing substantial revenue.
Waymo's inaugural private loan was increased to $5 billion, indicating strong investor confidence in its expansion plans.
GOOGL: MS says Waymo is an underappreciated agentic differentiator, sees ~$20B revenue by 2032
MS sees Waymo as strategically differentiated as Gemini agents eventually use Gmail/Calendar context to pre-plan autonomous rides, creating another path to re-rate GOOGL; reiterates OW/$400.
Guggenheim raised its GCP numbers, indicating strong performance in the cloud segment.
The company's decision to pull Flash and Pro access for free Gemini users suggests a strategy to leverage subscription limits as a margin lever.
VST traded with CEG on GOOGL’s 3.6GW deal, on top of the DOE’s $4.2B conditional loan for 433MW of VST uprates announced yesterday. MS’s new BE primer sizes a 76.5GW US data-center power gap through 2029 and argues grid power effectively costs $323/MWh once...
The company released Gemini 4 Argon, a near state-of-the-art model, which is seen as a positive development.
Gemini 4 Argon's introductory pricing is significantly lower than competitors, making it an attractive option for users.
The model's maximum output length has substantially increased, offering greater capabilities compared to competitors.
Gemini 4 Argon removes a key AI overhang, with state-of-the-art performance and attractive pricing, reinforcing management's commitment to frontier models.
The release of Gemini 4 Argon is seen as the restart of Google's product cycle, with capacity being the key watchpoint.
Investors are primarily focused on when the company will release its own consumer agent product, indicating a desire for more direct consumer-facing AI applications.
The stock gave back early gains from the Gemini 4 Argon news, as consensus suggested the results were heavily benchmarked, shifting focus back to search concerns and the perceived lack of consumer agentic products.
The market's reaction to Gemini 4, despite strong benchmark performance, suggests skepticism that it was heavily optimized for benchmarks, and the gradual rollout due to safety concerns makes true performance difficult to assess.
Anthropic / AMZN / GOOGL: Cloud partners generated 47% of 2025 revenue – Reuters Reuters reports Anthropic’s IPO filing shows $2.16B, or 47% of 2025 revenue, came through AWS and Google Cloud, up from 32% in 2024 and 11% in 2023. Anthropic paid $351M in dis...
The company's Gemini 4 "Argon" model appears solid and competitive on benchmarks, suggesting strong performance in AI.
The stock price dropped after a report indicated internal skepticism about the flagship AI model's performance in key areas.
Bears might argue that the company is still 1-2 months behind competitors, and a catalyst for bulls is lacking amidst ongoing search fears.
MRVL +4.5% as MediaTek fell 7.1% in Taipei on rumors that GOOGL’s TPU v9 (HBM4E) work could shift to MRVL; MediaTek called the order-loss claims false. Investor day is next Tuesday (10/6), where Jefferies expects a $40B+ FY30 revenue target (~$22B custom, ~...
Google filed appeals against two EU orders requiring it to give rival AI developers access to services available to Gemini and share search data with competing search engines.
Google argues the requirements would weaken Android security and expose private searches.
Piper estimates external TPU sales to exceed $100 billion by 2028, with capacity scaling towards 3GW/6GW run-rates, formalizing this revenue stream in its model.
Piper raised 2027/28 Cloud revenue estimates significantly above consensus, seeing external hardware as an underappreciated catalyst supported by Anthropic demand and new compute capacity.
Google's Search & other revenue grew 17% in the June quarter, indicating continued strength despite concerns about AI Overviews.
All AI chatbots combined still sent only 0.29% of web search referrals in August, compared to Google's 88.55%, suggesting a minimal impact from AI assistants on Google's search dominance.
Rollins, an pest-control company, reported that its leads from online marketing fell about 5% from March 2025 and then by double digits from late May 2026, which it attributes to Google showing AI Overviews and customers asking chatbots instead.
Rollins is moving spending off Google's pay-per-click ads due to the impact of AI Overviews and chatbots.
The company is nearing the release of its flagship Gemini 4 AI model, which has entered post-training and could launch significantly earlier than year-end, with encouraging internal results and plans for rapid iteration.
DeepMind's chief is confident the company will remain at the AI frontier, with Gemini 4 already being used internally for its Antigravity coding tool, and DeepMind's model roadmap is informing the next two to three generations of Google's TPUs.
The company's core search is tracking high single-digit growth in Q3, exceeding internal projections, and Gemini 4 is reportedly nearing release.
GOOGL +1.3% with Gemini 4 reportedly nearing release. A check we heard had Google core search tracking HSD in 3Q vs. the 7.5% they'd penciled in, though on AI Mode citation clicks, they said it doesn't come close to offsetting the loss in traffic relative t...
AI Mode citation clicks are not offsetting the loss in traffic relative to the conversion rate increase, indicating a potential challenge in monetizing AI features.
Anthropic is in early talks to lease up to 1GW of data center capacity, with Google potentially guaranteeing part of the financing, indicating Google's support for AI infrastructure.
Qualcomm and Google are expanding their agentic AI partnership across phones, PCs, and vehicles, with Gemini Intelligence set to accompany new smartphones in 2026.
The stock is underperforming as a perceived loser in the consumer agentic trade.
The company has a potential offset to the risks posed by agents through greater CPU/GPU demand on its cloud platforms.
Beyond cloud, the company has a bull case due to Gemini and its distribution through Search, Chrome, and Android, which could allow it to make its own agents the default and avoid ceding customer relationships.
The bull case suggests the company can own the new starting point for consumer interactions, even if the traditional starting point changes.
The negative read-throughs are the names that have been underperforming over the past couple of weeks on the theme: OTAs on the risk agents take over travel discovery and booking; GOOGL +1.5% on potentially fewer traditional searches and monetizable clicks;...
The company is underperforming due to weaker third-party advertising data, with a reported 1 percentage point risk to Q3 ad growth.
The stock experienced negative read-throughs due to the risk of agents taking over traditional searches, potentially leading to fewer monetizable clicks.
The company faces an uphill battle in convincing tech investors that consumer agents are not a real threat, as the agent could become the default destination and pressure the economics of underlying platforms.
The stock contributed to a strong day for hyperscalers.
The stock underperformed competitors since the Muse launch.
META +50bps contineus to outperofmr AMZN -1% and GOOGL -60bps since the Muse launch. Zuck was out yesterday in an X post basically saying they aren’t slowing down and most compute focused on serving users rather that RSI. Citi opened a 90day catalyst watch...
Google is now allowing all engineers to use Anthropic's Claude, indicating broader internal adoption of advanced AI tools.
The company is now allowing employees to use Claude code, which makes sense.
Software +1.5% the main beneficiary of the talk so far on rotation and as a “potentially” slower frontier takes some urgency out of the SaaS-disruption bear case. Cyber +4% strongest sector. Internet +50bps also up led by META/GOOGL +2%
The stock saw a positive movement, potentially driven by rumors of breakthroughs in AI research.
The Polymarket prediction market indicates a high likelihood of the Gemini Pro model being released by October, with a significant jump in probability for an earlier release.
The stock's chart is showing signs of improvement, bouncing off its 200-day moving average, suggesting a potential upward trend.
Third-party data suggests search results are in line with expectations, and online display advertising is tracking ahead, indicating solid performance in key business areas.
There is an expectation of short covering and buying activity leading into the quarter and potential Gemini Pro release, which could further boost the stock.
A poll indicated that a significant majority of investors believe the stock has not yet reached peak pessimism, suggesting potential for further downside.
Blackstone plans to significantly increase its purchase of Google TPUs, implying tens of billions of dollars and multiple gigawatts of AI compute, indicating strong demand and investment in Google's AI infrastructure.
Oppenheimer anticipates approximately $170B in external TPU sales through 2028, which could drive 15–30% GCP revenue upside compared to Street estimates.
Oppenheimer models approximately 6.6GW of external TPU sales through 2028, with annual TPU revenue projected to ramp from approximately $19B in 2026 to $50B/$101B in 2027/28.
Oppenheimer's revised GCP estimates are approximately 15%/30% above Street estimates for 2027/28, implying approximately 4%/18% upside to consolidated EPS even with conservative 30–35% TPU margins.
Oppenheimer states that Google's consumer AI positioning remains strong, with Gemini second only to ChatGPT in usage and significantly higher trust than Meta for sensitive use cases, reiterating an Outperform rating with a $400 price target.
The company has a significant opportunity to monetize its TPU technology externally, with projected revenue ramping significantly through 2028.
GOOGL +60bps as Oppenheimer said GOOG could sell ~6.6GW of TPUs externally through 2028, worth ~$170B cumulatively, with annual TPU revenue ramping from ~$19B in 2026 to ~$50B/$101B in 2027/28.
Investors are frustrated that Google was not at the forefront of the agentic AI trend, and rotation into META is adding pressure to the stock.
The release of Muse intensifies fears that agentic AI could take over customer relationships and steer transactions, forcing platforms like Google to compete harder and potentially lose economics.
Muse gaining top-of-funnel shopping and transaction activity could pressure Google Search, increasing the importance of Google’s Shopping, Search, and Gemini roadmap.
We’re also hearing plenty of frustration from GOOGL -2% investors asking why Google wasn’t out in front of this, with rotation into META potentially adding to the pressure today. This release should only intensify the agentic fears that Instinct has already...
SemiAnalysis says its first third-party TPUv7 Ironwood inference benchmarks show up to ~50% better performance/$ vs. B200/B300 on FP8 aggregated serving, with the advantage driven by lower TCO rather than superior raw chip performance.
Google is externalizing the TPU software stack, with native TorchTPU support for vLLM/SGLang targeted to open-source around mid-October, materially lowering the CUDA/software-moat barrier for outside customers.
SemiAnalysis expects the performance gaps with NVIDIA to narrow as Google adds disaggregation/spec decoding, and TPUv8i adds native FP4 and an inference-specific network architecture aimed directly at Rubin-era workloads.
Cloud CEO Thomas Kurian stated that Google Cloud is acquiring new customers at twice the rate of a year ago, with $100m-plus deals doubling, indicating strong growth and market penetration.
The company has 17 product lines each exceeding $1bn in revenue, demonstrating a diversified and successful product portfolio.
Customers typically spend 50% more than they commit, suggesting strong customer satisfaction and expansion within the platform.
The TPU business is more than twice the size of the next largest hyperscaler’s, highlighting a significant lead in AI-specific hardware.
AI-server payback is under two years, and half that on Google’s own chips, indicating efficient and cost-effective AI infrastructure.
The majority of infrastructure contract value is in five-year contracts, providing long-term revenue visibility.
TPUs are now sold in three ways, including outright purchase for customers’ own data centers and a neocloud setup with Blackstone, expanding market access.
Gemini Enterprise is used by over 90% of the Fortune 100, and AI attach across Cloud customers is 80%, demonstrating strong enterprise adoption of AI solutions.
The company is accelerating its schedule for developing and rolling out customized chips, shifting to introducing two chips a year and potentially more, to stay ahead in the AI race.
The company's bigger issue remains the delayed Pro roadmap, with internal 3.5 Pro candidates scrapped for insufficient improvement and Gemini 4 still requiring posttraining.
The stock was weak, potentially due to OpenAI's announcement of its new ad model reaching $1 billion in ARR, which could pose a competitive threat to search advertising.
Nowak at MS raised its first-party TPU pricing assumption to $27B/GW from $20B, and now sees $84B/$108B of TPU-related Cloud revenue in 2027/28, lifting total Google Cloud revenue estimates by approximately 6%/7%.
Nowak now expects Cloud to reach approximately 48% of company EBIT by 2028.
The stock continues to lag other hyperscalers.
Lower-margin TPU sales are expected to keep Cloud margins around 37–40%.
AMZN/GOOGL -35bps continue to lag. Nowak at MS had a note out on TPUs raising its first-party TPU pricing assumption to ~$27B/GW from $20B and now sees ~$84B/$108B of TPU-related Cloud revenue in 2027/28, lifting total Google Cloud revenue estimates by ~6%/...
Waymo has developed a custom ASIC for its latest robotaxis, reducing its reliance on Nvidia and AMD while enhancing sensor processing and AI inference capabilities.
The custom chip delivers over 1,000 TOPS, which is comparable to Nvidia's latest autonomous-driving systems, and is manufactured by TSMC on its 5nm process.
Alphabet's debut of Australian-dollar debt, with its 20-year tranche yielding 6.98%, represents the highest coupon/yield it has ever paid on a bond, highlighting the elevated cost of AI debt.
The elevated cost reflects the global surge in long-end yields and indicates how hyperscalers' massive AI-related borrowing is increasingly competing with sovereign issuance, potentially driving up funding costs.
Reports indicate GCP growth in the mid 90s, which is above Street expectations.
Google's search share improved in July.
RBLX/RDDT/META/GOOGL: Piper Says July Ad Checks Remain Strong, with Reddit Users Mixed
Piper says July ad buyer checks were broadly positive, with market growth roughly 130bps above expectations and 3Q spending estimates moving about 50bps higher. Piper says RDDT and ROKU saw the largest positive revisions, while META CPM growth accelerated t...
The stock continued to decline following AI departures last week.
Gemini's market share declined in the last month for the first time in the last year, according to Similarweb data, raising concerns about its competitive position.
The stock rose after releasing a local model that rivaled Opus 4.5 performance, indicating strong AI capabilities.
GOOGL/AMZN +1% META +50bps after releasing some a local model that rivaled Opus 4.5 performance. Zuck also wrote a long AI letter
SemiAnalysis argues that the DeepMind brain drain is a near-term GCP bull case, as compute is increasingly redirected towards external customers, driving explosive growth in TPU sales.
SemiAnalysis estimates that a significant portion of TPU shipments are being sold directly to Anthropic, and GCP could reach substantial third-party AI ARR and TPU system sales by end-2027.
SemiAnalysis estimates TPU system sales could push 2027 GCP growth into the mid-100% range, significantly exceeding Street expectations, and add substantial value to Google's EPS and RPO.
The FT reports a shift in AI control from London to Silicon Valley, with Demis Hassabis stepping back from day-to-day leadership of DeepMind, reflecting a move from research-first culture to commercial urgency.
The reorganization has stirred concern over talent retention and DeepMind's research culture, with Alphabet shares falling after the announcements due to investor concern about AI spending and commercial returns.
The internal view at Google is that the executive shakeup is more of a formality and spiritual departure, with Koray Kavukcuoglu already being the main person on models.
The prospect of reaching AGI and ASI is becoming increasingly overdetermined, suggesting that leadership changes may not significantly impact the overall trajectory.
The stock shed 4 percent on news of key AI leaders leaving, with the outside world interpreting it as Google losing pillars of its AI efforts at a critical moment.
The company maintains involvement in the startup via equity and cloud partnership, indicating continued strategic interest.
The departures of moonshot-oriented individuals may lead to increased focus for the broader business.
A key AI team member's departure to a startup is a negative development for the company's AI narrative.
The attrition of key personnel suggests dysfunction and a bureaucratic organizational culture.
The departure of a highly respected individual, intimately involved in AI models and TPUs, is a significant red flag.
Google is increasing orders for TPU AI server chips due to rising demand, with market researchers projecting TPU demand to reach 15 million by 2028, surpassing Nvidia's current annual production.
The stock played catch up to other hyperscalers, indicating positive investor sentiment.
Just like GOOGL (+5%) played catch up to MSFT/AMZN (+5%) on Friday, today it was META’s (+6%) turn to outperform, along with the 2nd order trades: ORCL (+9%) and the Neoclouds (CRWV +19% / NBIS +11%), the rationale being that positive ROI is good across the...
Headline #s better than expected in typical RDDT fashion but focus remains on slowing user growth/search shifting to AI/GOOGL reliance in a redux of narrative back in early 2025 - hard to see stock working until these issues show progress (will be harder to...
The stock received some positive attention after its previous week's negative performance.
Hypers mixed: GOOGL +2% getting some love after last week’s disaster but META/AMZN -20bps.
There are rumors and chatter suggesting that Gemini Pro 3.5 will be released soon with very good benchmarks.
Polygon data indicates a low probability (4%) of Gemini Pro 3.5 being released by this Friday, and a high probability (87%) of it not being released by July 31.
Online ad spend came in ahead of expectations in Q2, helped by a stronger June, World Cup activity, and Amazon's shifted Prime Day timing, with performance budgets outpacing brand spending.
The risk of higher capex pressures 2027-2028 EPS, offsetting stable Search and Cloud demand.
The stock continued to roll over.
META -2% digesting last week’s big move while GOOGL -1.3% continues to roll over.
The company's vertically integrated AI stack, encompassing custom TPUs, models, cloud infrastructure, networking, and power, positions it to capture more value from AI while improving efficiency and lowering cost per token.
The TPU v8 split between training and inference is a crucial step towards better workload optimization, with external demand broadening across customers like Anthropic and Apple, alongside substantial internal deployment.
The company's deep TPU roadmap and end-to-end infrastructure are expected to support continued Cloud growth and reduce reliance on merchant GPUs.
The company's primary constraint is now power and data center capacity, rather than demand.
The stock performed weakly, indicating a negative sentiment among hyperscale companies.
Hypers weaker: META -2%, AMZN -1%, GOOGL
GOOGL +2% / META +3% leading hypers higher while AMZN +60bps lagged. Wang was out saying METEA’s models caught up to Chat GPT 5.5 while Semianalysis also defended the move to sell compute. We flagged this in our morning wrap on META from Slack, which w...
The company's Maps application may soon offer direct food ordering and pickup options, which could negatively impact DASH and UBER.
The firm believes a broader ruling on antitrust and digital markets could ultimately benefit other large platform companies, including GOOGL, AMZN, and MSFT, by providing greater protection against expansive antitrust remedies.
Morgan Stanley raised its price target, arguing that investors are underestimating Google's AI infrastructure earnings power as compute capacity scales.
The company benefits from durable measurement and attribution advantages in advertising, particularly with GenAI budgets being largely incremental.
There were two key departures from Deepmind.
The stock experienced weakness due to key departures from Google Deepmind, specifically John Jumper and Gemini co-lead Noam Shazeer, who left for Anthropic and OpenAI, respectively.
The narrative surrounding the stock was already negative, with it being a funding short among fast money investors due to mixed intra-quarter search data and a worsening near-term narrative regarding coding, enterprise, and frontier model positioning.
The stock was down due to increased talk of Google and MediaTek collaborating on TPU V9.
AVGO -4.5% after more talk of GOOGL and Mediatek getting closer for TPU V9, this time from Ming-Chi Kuo:
Google's reported ~$50/watt GPU rental agreement indicates that hyperscalers are generating significantly more revenue per unit of AI compute than investors currently assume.
Hyperscaler AI returns are improving, supporting further upside to cloud revenue forecasts and increasing confidence in a $1T+ hyperscaler capex outlook.
Checks indicate that Q2 performance is in line with expectations despite the continued scaling of OpenAI ads.
GOOGL/AMZN/META: Morgan Stanley Sees Google’s $50/Watt Compute Deal as Evidence AI Monetization Is Exceeding Expectations
The stock experienced significant weakness, with no clear explanation.
Megacap weakness the big story today with lots of questions around the weakness and no great answers for AMZN/GOOGL down 2.5/3.5% each.
The stock generally outperformed, consistent with large-cap trends.
Large cap generally outperformed with GOOGL/META +1% and AMZN flat.
VRT -4% as GOOGL is opensourcing its own liquid cooling solution to retrofit air cool designs:
Wells Fargo estimates Gemini API revenue reached approximately $1.5B in Q2, nearly tripling quarter-over-quarter, and could exit 2026 at a ~$14B annualized run-rate, making it a significant GCP revenue contributor.
The acceleration is attributed to rapid enterprise adoption, surging token consumption, and the launch of Gemini 3.5 Flash, which carries materially higher pricing.
Wells Fargo believes volume growth and mix shift toward higher-value models are more than offsetting pricing pressure, despite the falling cost of intelligence.
The firm views Google's full-stack ownership—from TPUs to GCP to Gemini—as a key advantage as AI monetization increasingly shifts toward consumption-based models.
The stock saw a tactical bounce after one of the worst weeks for mega-cap stocks versus the market in recent years, suggesting a potential rebound.
Benchmark argues investors are underestimating the potential financial impact of Google’s Search and AdTech rulings, particularly follow-on damages claims tied to AdWords and AdSense/Search partnerships.
While any resolution would likely take years and may be settled through ad credits rather than cash, the firm believes the potential liability could be substantial.
The stock showed early strength, gaining 1-2%, alongside other hyperscalers.
Third-party data indicates that Google's AI subscription rose month-over-month in May for the first time since December, driven by the low-cost Plus Tier.
In Tech, some hyperscalers strength early with AMZN, META and GOOGL +1-2%. Some strength in ALAB, NBIS, CRWV (all +5%) as they get added to Nasdaq 100.
The risk/reward profile becomes more interesting below $350, with potential upside to $400.
Long-term investors have not considered abandoning the stock due to a strong long-term narrative.
AVGO +3.5%. The Information had an article saying GOOGL turning to Samsung for Future AI Chip capacity. The article said TPU 10 chip could enter mass production as early as 2028 and called out Google working with MediaTek on the design. Some in Slack p...
Megacap largely weaker: GOOGL/AMZN/META all down more than 2%.
Wolfe substantially raised its forecasts for Google Cloud, arguing investors continue to underestimate the scale of AI infrastructure demand and the contribution from Anthropic. The firm now expects GCP revenue growth of 81%/48% in 2026/27, well above Street expectations. Wolfe estimates Anthropic could represent ~25-30% of GCP revenue by 2027, driven by large compute, inference, training, and revenue-sharing agreements. Hyperscaler AI investment is still accelerating rather than peaking, with Google potentially adding 15GW of capacity in 2028, supporting a much larger long-term cloud and AI opportunity than currently reflected in consensus estimates.
TD Cowen raised its Google Cloud and overall GOOGL estimates, arguing the Street is still underestimating the scale and returns of Google’s AI infrastructure buildout. The firm models total Google Cloud revenue rising to ~$480B by 2031, a ~37% CAGR, with Google Cloud AI revenue rising from ~$32B in 2026 to ~$301B by 2031, a ~56% CAGR. Cowen expects Alphabet’s total GW capacity to rise >10x from 2022-2031, with Google Cloud representing >75% of Alphabet GW capacity by 2031. The firm also raises capex materially above Street but argues returns remain attractive, with Google Cloud margins expanding steadily and incremental revenue-to-capex improving from ~$0.50 per $1 in 2026 to ~$0.80 in 2027.
GOOGL/AMZN: Wolfe Gets More Aggressive on Hyperscaler AI Buildout, Raises Revenue, CapEx, and EPS Estimates
Mizuho came away more constructive following AI ASIC supply-chain checks, arguing TPU deployments could exceed 35M units by 2028, implying >10x growth from current levels. The firm sees the largest beneficiary as AVGO, where expanding TPU deployments, OpenAI ASIC opportunities, MTIA ramps, and a differentiated full-stack ASIC platform could support a potential $600B+ TPU revenue opportunity by 2028 and alleviate concerns around GPU competition. Investor expectations are too low for the scale of the TPU and custom ASIC opportunity.
AVGO/TPUs/GOOGL: Mizuho Says TPU Wave Is Just Beginning, Sees Significant Upside Across AI Silicon and Memory
GOOGL was confirmed as a customer of INTC, placing an order for over three million Tensor Processing Units in 2028, likely for EMIB.
INTC +11% after TheInformation confirmed GOOGL as a customer saying that GOOGL “recently placed an order with Intel to manufacture more than three million Tensor Processing Units in 2028, after months of testing Intel’s advanced packaging technology.” Some...
The stock was a large-cap underperformer, with ongoing debate about the implications of likely equity raises for the group.
Large cap a big underperformer today: AMZN -33bps; GOOGL -1.3%; META -1.3% as debate continues around what likely equity raises mean for the group.
Search trends are improving due to ROI gains, with Q2 trending above Street expectations.
The $85B capital raise signals stronger-than-expected AI demand and infrastructure requirements, driven by accelerating Gemini adoption, growing cloud backlog, and expanding TPU deployments.
The capital raise, despite a modest dilution overhang, will support AI infrastructure expansion and strengthen the company's competitive position across search, cloud, and foundation models, reflecting confidence in long-term AI returns.
The company is well-positioned to capture incremental value in the security value chain due to its broad telemetry, workflow ownership, and closed-loop security capabilities.
AVGO: Numbers missed very high expectations; Hock Tan with a sub-par call performance only reiterated F27 and spoke of GOOGL competition; but F28 commentary on callbacks positive.
remediation, response, governance, and audit workflows. As a result, platform vendors with broad telemetry, workflow ownership, and closed-loop security capabilities—such as PANW, MSFT, CRWD, GOOGL, and CYBR—appear best positioned to capture incremental val...
UBS updated its cloud model, leading to higher cloud growth forecasts of 24% in 2026 and 34% in 2027, ahead of consensus.
Needham argues Google’s planned $80 billion equity raise is an important signal that AI infrastructure investment requirements are likely moving higher across the industry.
Google’s balance sheet, low cost of capital, and ability to fund AI investments at scale are key competitive advantages, using financial strength as a moat in the AI race.
The equity raise is supportive of demand across the AI supply chain, and Berkshire Hathaway’s $10 billion investment is a notable vote of confidence in Google’s long-term AI strategy.
UBS maintained its Neutral rating and $410 price target, arguing stronger cloud growth is being offset by near-term margin pressure from AI-related workloads and chip sales.
UBS lowered EPS estimates modestly as a greater mix of TPU sales and large AI infrastructure deals weighs on profitability, with cloud margins now expected to decline to roughly 27% by 2027.
The firm expects margins to recover longer term as higher-value Vertex AI revenue becomes a larger portion of the mix, but remains cautious on the timing and execution of AI monetization.
The $80 billion equity raise provides balance-sheet flexibility to support aggressive AI infrastructure spending, which is expected to drive significant long-term compute revenue.
The company has a very strong AI narrative, owning the stack from top to bottom, which is a significant positive.
The massive narrative shift towards AI has occurred while search and clicks have accelerated and beaten expectations, which has mitigated concerns about AI disruption in search.
GCP is likely to accelerate to something close to 80% growth this quarter, indicating strong performance in its cloud segment.
The stock declined after raising $80 billion in equity, which raised questions and contributed to a negative sentiment.
There was existing talk about the company being a funding short due to a perceived lack of upside and falling behind in coding/enterprise, with third-party search data worsening.
Intra-quarter third-party search data has worsened, with some sources calling for a 2-3 percentage point miss, and M-sci also pointing to weakness in Network and YouTube.
If investor perception shifts on search deceleration, it could remove a key tailwind for the stock's multiple, especially if search fears become more prominent.
The risk/reward to the upside does not seem great with the stock at $380, given a potential CY27 EPS of $16 at 25x, suggesting a target of $400.
The stock is likely to become a funding short among pods in the near term, with a potential downside to fill the earnings gap at $355, though dip buyers are expected around $350.
Piper raised its price target to $445 and increased Search revenue estimates, citing strong citation share, accelerating AI Mode adoption, and management commentary that AI Mode queries are running at record levels.
The company is viewed as the primary beneficiary of AI-assisted search, which is scaling quickly.
GOOGL/RDDT/META: Piper Sees AI Search Expanding Rapidly, Raises GOOGL PT to $445
The company's stock price decreased following negative third-party data from Friday, indicating a negative market reaction.
NVDA +2% announced they are entering the market with a new RTX chip, which has ARM +11% early and INTC -5%/AMD-4%/QCOM -9%. Memory the bright spot in semis while opticals continue to lag. Hyperscalers weak with GOOGL -1% following through on the neg 3p data...
The stock underperformed due to a rotation out of hyperscalers, as investors shifted funds to software names without selling AI semi longs.
The stock saw further weakness in post-market trading following the announcement of an $80 billion capital raise.
Both Yipit and M-sci are calling for a miss in advertising revenues, with Yipit 3% below street and M-sci 1-2 percentage points below street, and M-sci also predicting misses for Networking/YouTube.
INTC: Hearing Edgewater saying INTC expected ramp GOOGL/MTK TPU on EMIB-T packaging starting in late CY27
TER +2% as UBS recapped meetings with mgmt arguing GOOGL qualification by CY26 is the next major upside leg and could help close the gap between Street CY28 revenue estimates of $6.7bn and UBS at $7.4bn.
This isn’t exactly that (timing of a SOTA-like model expected in next 1-2 months given Wang’s recent interview), but definitely helps especially on a stock that is roughly flat since the QQQs (including GOOGL and AMZN) started ripping in early April.
The stock was largely weaker early.
MU +8% getting close to $1k. Lots of your favorite AI semi names up 4-6%. Internet and Software down early, the latter led lower by ZS’s -25% horrid print, which is bringing down other cyber names as well (PANW/CRWD -4%). Interestingly, hyperscalers largely...
Semianalysis suggested that margin gains are somewhat illusory because DeepMind/Gemini training costs, exceeding $10 billion run-rate, are categorized under "Alphabet-Level Activities" rather than GCP.
The stock performed better, moving back above its 20-day moving average.
Some third-party data providers point to a potential beat.
GOOGL/META: RBC Says OpenAI Ads Rollout Creates Competitive Pressure, Questions Monetization Path
Other third-party data points to a miss, and the stock has dipped below its 20-day moving average.
Large cap weaker: GOOGL -1.2%/AMZN -80bps. 3p data on both of these mixed.
The company is well-positioned, competitive in everything except coding, and still state-of-the-art in multimodal AI, with 3.5 Pro coming soon.
The company touches every corner of the AI stack, allowing it to strategically allocate resources based on a return on invested capital (ROIC) approach, rather than solely focusing on having the best model.
The company's vision for consumer agents is powerful, offering an intuitive way for the majority of consumers to interact with advanced AI models.
Third-party data on the company was mixed, with Yipit pointing to a 2 percentage point miss, while Oxford and M-sci indicated a 2 percentage point beat.
The narrative surrounding the company's stock has become less exciting post-I/O, especially with concerns about Flash 3.5 not being competitive for coding.
The stock is historically expensive, despite a generally positive narrative.
The stock dipped below its 20-day moving average for the first time since early April.
Large cap weaker: GOOGL -1.2%/AMZN -80bps. 3p data on both of these mixed.
Google I/O showcased rapid AI innovation across Search, Gemini, Android, hardware, and agentic workflows, reinforcing Google’s positioning at the center of consumer AI adoption.
The firm highlighted improving Search utility/monetization, deeper Gemini integration, TPU scale advantages, and growing AI subscription potential through Gemini Spark/Ultra pricing changes.
Google I/O reinforced Google’s position as one of the most vertically integrated and strategically advantaged AI companies, with Gemini increasingly evolving from a chatbot into a broader agentic execution layer across consumer and enterprise workflows.
The firm highlighted Gemini 3.5 Flash, AI Mode/Search redesign, TPU scale advantages, and deeper integration across Gmail, Docs, Drive, Chrome, and coding workflows as key differentiators.
Google is successfully repositioning Search around AI-native behavior while widening its full-stack advantage across models, infrastructure, developer tools, and consumer distribution.
The keynote increased investor concerns around disruption risk for Online Travel Agencies (OTAs) as Google increasingly pushes toward agentic travel/search workflows and autonomous task completion directly inside Search/Gemini.
The launch of a universal cart, a persistent cross-merchant shopping cart, could commoditize merchant offerings by moving towards a planned agentic checkout mechanism.
The company's I/O event was generally well-received, with key announcements including new AI features in Search, an intelligent AI-powered Search box, over 1 billion monthly active users for AI Mode, and significant token processing growth.
The company is immediately monetizing its Spark feature, making it available to Ultra subscribers at new price tiers, indicating a clear path to revenue from its AI advancements.
The stock experienced a decline, interpreted as a "sell the news" reaction following the first day of its I/O conference.
Morgan Stanley highlighted a "Neocloud backup" option, arguing that excess compute capacity could eventually be monetized externally, potentially adding approximately 8% upside to 2028 EPS.
Upcoming product events are expected to demonstrate successful monetization and integration of AI across its ecosystem.
Google has lost its benchmark leadership to rapid model releases from competitors like OpenAI and Anthropic.
The stock experienced a negative movement as Google plans to release a new Gemini model at its annual I/O conference.
The stock underperformed other internet peers.
META +70bps getting some of the unloved bid today outperforming GOOGL -30bps and AMZN -1%. This chart getting passed around, although it was out yesterday
RDDT -4.5% despite RBC out with a positive note post recent GOOGL changes;
The company has shifted from an AI afterthought to a major player, positioning itself to potentially become the world's largest company by market capitalization.
Its diversified portfolio across Google Search, Cloud, YouTube, Waymo, competitive Gemini AI model, and investment in Anthropic provides resilience compared to Nvidia's more cyclical chip-focused business.
Investors view the company as the biggest potential winner in the AI ecosystem due to its presence across multiple segments of the industry.
Third-party reports indicate that ad search is tracking 1-2 percentage points below street expectations.
The stock was underperforming META.
The stock is approaching a significant price marker, with bulls enjoying its valuation multiple.
Mizuho raised its price target and increased its Cloud revenue and operating income estimates significantly above consensus.
The company's integration of Reddit content into AI Search could be seen as positive, implying the essential nature of such content for AI search quality, which bodes well for future licensing deals.
Changes to Google Search's AI features could negatively impact Reddit by packaging its content directly into AI overviews, reducing the need for users to visit Reddit's site.
The negative read-through here is GOOGL is now packaging RDDT’s most valuable content directly inside AI overviews so people never need to visit RDDT.
The stock continues to grind higher post-earnings, indicating sustained positive momentum.
Anthropic has committed to spending a significant amount on Google's Cloud and chips, representing a substantial portion of Google's total revenue backlog.
The company has the luxury of skipping ad-based monetization for its consumer chatbot, unlike OpenAI, and is expected to be a formidable player in enterprise AI.
GOOGL +1.3% and AMZN ++55bps continue to grind higher post-earnings last week. Post close got the # amount for the Anthropic/GOOGL deal:
The company has an inherent lack of taste in making consumer applications, which could hinder its consumer AI efforts.
Google's Cloud Chief highlighted that their differentiation comes from owning the IP, model, and chips, allowing them to invest more by not shipping 80% of revenue to external providers.
Bernstein sees continued outperformance from large platforms like Google, supported by resilience in Search ad trends despite softness in certain verticals and international markets.
Spend is increasingly concentrating with scaled players like Google, and AI-driven opex could support revenue upside.
The firm says GOOGL’s TPUv8 reinforces strong attach for ARM-based CPUs and increasing HBM/SRAM content, driving upside across AVGO, ARM, and MU. The analyst notes architectural shifts (boardfly topology, OCS, Axion CPUs) improve bandwidth and reduce latenc...
The stock led the market higher as investors reacted positively to recent TPU announcements, anticipating a strong earnings report with a potential 1-2 percentage point beat in search and a strong GCP number.
The company's cloud chief highlighted differentiation by owning IP, models, and chips, which allows for greater investment and competitive advantage compared to hyperscalers reselling others' technology.
From a factor perspective, Megacap led the way higher, helped by GOOGL/NVDA outperforming.
Google's Cloud Chief suggested that other AI providers depend on private capital markets which are reaching saturation, implying a shakeout in the market over the next year to two.
Concerns were raised about the stock's valuation approaching full levels at 25x earnings.
Q2 is healthy so far.
The firm adds early ramps of Broadcom Tomahawk 6 and deployment momentum at key customers (e.g., MSFT, AMZN, GOOGL) reinforce a strong upgrade cycle, with potential doubling of 800G transceivers per cluster.
The new TPU 8t chip delivers 124% more performance per watt than the preceding generation, and the TPU 8i provides a 117% gain, which is crucial for efficiency given power constraints in data centers.
75% of all new code at Google is now AI generated, indicating significant internal adoption and leverage of AI capabilities.
Gemini Enterprise paid monthly active users increased by 40% quarter-over-quarter, demonstrating strong growth in its enterprise AI offerings.
Digital ad checks point to resilient 1Q budgets with limited downside risk, and the firm prefers GOOGL into the print given upside potential in Search and accelerating Cloud.
The firm prefers GOOGL into the print given upside potential in Search and accelerating Cloud, while viewing META as broadly solid but with capex scrutiny persisting, TTD as facing near-term noise but supported by easing comps and event-driven tailwinds, an...
Macro uncertainty (Middle East/oil) could drive more conservative 2Q guides, with advertisers holding spend steady near-term but showing increased caution.
GOOGL/META/TTD/PINS: Stifel Sees Solid 1Q Ads but Cautious 2Q Guides; Prefers GOOGL into Print
MRVL +6%/GOOGL/AVGO: Google in Talks With Marvell to Build New AI Chips for Inference
The European Commission proposed requiring Google to share search data with rival search engines and AI chatbots under the Digital Markets Act, potentially benefiting competitors.
The measure is part of broader EU enforcement against Google's market dominance and follows separate probes into favoritism of in-house services and app store practices.
Google stated it would 'vigorously defend' against what it called regulatory overreach that threatens privacy and security.
The EU could impose additional penalties beyond the €9.5 billion in fines Google already faces.
A healthy online advertising macro is driving accelerating Search revenue as Gemini's product strategy evolves for consumers and enterprise.
Robust Cloud/AI demand suggests the company could report revenues and operating income above consensus as new products roll out.
The company faces mass arbitration claims from advertisers seeking billions in damages due to court rulings that found it illegally monopolized online search and advertising technology markets.
Third-party reports indicate that ad/search performance finished 1-2 percentage points above street expectations.
Third-party tracking indicates positive performance for Search/ad, running 1-2 percentage points above street expectations, and mid-50s for GCP.
Ad/GOOGL/META: DB Expert Call — 1Q Spend Beat Expectations, 2Q to Accelerate to on World Cup/USA250, but Visibility Collapsing
The stock experienced a decline in early trading.
The company is considered the most resilient ad stock in a slowdown compared to META, as Search has higher advertiser exposure to non-discretionary services.
The company's expense structure is better positioned to handle a revenue slowdown, with less EBIT deleverage compared to META.
Analysis of GCP capex implies meaningful revenue upside, with potential for 1Q26 GCP revenue to be 7% above consensus, rising to 17% by 4Q26.
Early price action shows continuing of yesterday: Memory names weaker while large cap tech is outperforming (AVGO /GOOGL/NVDA/MTEA/AMZN/AMD +1.5% while memory/HDDs flat to down), the perception being what is bad for memory is good for hyperscaler ROI. There...
AVGO/GOOGL/NVDA/MTEA/AMZN/AMD +1.5% /HDDs
Oppenheimer prefers GOOGL over META in a weaker macro, arguing Search has higher advertiser exposure to non-discretionary services vs. META’s DTC e-commerce long tail, and Google’s expense structure is better positioned to handle a revenue slowdown (~200bps...
The company was part of the 'Mega cap strength' trend, indicating strong performance.
Mega cap strength: GOOGL +5%; META +6.5%; AMZN
Evercore ISI reiterated its Outperform rating and price target, as its survey showed ChatGPT's share of primary search selection stalled at 11% while Google recovered to 75%.
The firm found no material slippage in Google’s dominance of commercial-intent search categories like shopping and travel, suggesting any share loss is concentrated in less monetizable general information queries.
Channel checks corroborate the bull case, tracking consistent or accelerating Q1 search revenue growth with one check showing conversion rates doubling YoY.
Morgan Stanley raised its 2028 Waymo miles and revenue forecasts due to faster-than-expected scaling, with cumulative miles driven 6% ahead of estimates and broad-based outperformance.
Waymo's latest safety data shows it is roughly 6x safer than human drivers, which is critical for continued scaling.
GOOGL/UBER: Morgan Stanley Raises Waymo Estimates on Faster-Than-Expected Scaling, Remains OW on Both
A Los Angeles jury verdict holding Google liable for designing addictive products that harmed a young user threatens to expose the company to thousands of similar product-liability lawsuits, potentially forcing fundamental changes to its platforms' features and advertising models.
The verdict, combined with a separate $375 million New Mexico ruling against Meta, signals a shift in legal liability away from content moderation immunity toward platform design practices.
META/GOOGL: Meta, Google Risk Big Tobacco-Like Fallout After Addiction Trial
Digital ad spend is tracking strongest for the company, with Search and YouTube showing strong year-over-year growth.
Pricing remains firm with higher CPCs/CPMs as advertisers prioritize revenue over margins, supported by sports and election tailwinds.
Google is integrating Gemini deeper into DV360 to automate media planning and buying, making Gemini the operating layer of the DSP and enabling marketers to translate media plans into comprehensive campaign setups.
RBC stated that Google could benefit from OpenAI taking “unjust credit” for upper-funnel activity, reinforcing Search’s positioning.
RBC stated that OpenAI’s plan to introduce ads to all free ChatGPT users highlights significant pent-up advertiser demand but raises questions around conversion and measurement, with early checks suggesting weaker performance vs. Google Search.
GOOGL/META: RBC Says OpenAI Ads Rollout Creates Competitive Pressure, Questions Monetization Path
The company is testing a Gemini Mac app to compete with ChatGPT and Claude.
The stock held up relatively well compared to other large-cap names.
3p raised GCP numbers to close to mid-50s for the quarter.
Edgew was also positive on the stock.
The stock outperformed other large-cap companies, showing strong investor interest.
The company's search revenue is tracking slightly ahead of Street expectations, and Google Cloud Platform (GCP) checks indicate continued strong performance.
The upcoming Cloud Next event is identified as a potential positive catalyst.
The company struck a multi-billion dollar deal with Meta for TPUs, which analysts estimate could add significant upside to 2027 EPS.
GOOGL +20bps on the news they struck a mult-B deal with META for TPUs.
AI is structurally expanding the search total addressable market, allowing the company to address more query types and extract greater commercial intent from informational searches.
The company can potentially pull retail media budgets back toward search as agentic experiences mature.
The company is believed to be able to sustain search growth in the teens, with potential upside to 20% or more.
The narrative around the company has shifted negatively in recent days, focusing on OpenAI's competitive advancements.
The company's $20 billion debt offering was 7 times oversubscribed, indicating strong investor confidence.
Bulls argue that AI could help accelerate and improve game development, acting as a productivity multiplier.
The release of Project Genie, which creates interactive worlds, poses a long-term risk to game engines and developers by potentially making them obsolete.
META/GOOGL: KeyBanc Lowers PT to $835, Flags Near- Term Product Cycle Lag
KeyBanc lowers its Meta price target to $835 while maintaining an Overweight, the firm says, arguing 2026 product-cycle benefits skew more clearly to GOOGL despite Meta’s valuation already reflecting AI capex and ROI concerns. The analyst notes META trades...
Wolfe's deep dive suggests Street estimates for GCP growth are conservative, with higher growth projected for FY26 and AI revenue contributing significantly, leading to improving ROIC.
TPU volumes are expected to reach significant levels by 2026 and 2027, with external TPU licensing potentially generating billions in high-margin revenue by 2030.
AMZN / GOOGL: Wolfe Deep Dive Raises AWS and GCP Growth, Lifts 2026 CapEx Forecasts
The stock rose following Apple's announcement of a revamped Siri coming in the second half of 2026 and the consideration of running its chatbot directly on Google Cloud and TPU chips.
GOOGL +2% as AAPL said revamped Siri coming in 2H’26 and mulling running chatbot directly on GOOGL Cloud and TPU chips
The company's TPU is rapidly closing the compute cost gap with Nvidia, potentially achieving cost parity or slight superiority compared to Nvidia's GB200 NVL72.
Developer requests for Gemini have more than doubled in five months, and Gemini Enterprise has grown to 8 million subscribers across 1,500 companies, indicating significant momentum.
The company was identified as a "Best Idea" due to its asymmetric growth and valuation setup, with AI already lifting advertising growth and offering optionality through its cash-funded AI buildout, TPU, and Waymo.
Customer feedback on Gemini Enterprise has been mixed, with a slim majority having favorable experiences, but nearly half expressing dissatisfaction.
OpenAI's potential advertising revenue could scale to over $25 billion annually by 2030, directly challenging Google's core Search monetization by redirecting high-intent commercial queries and marketing budgets.
Q4 performance finished 2-3 percentage points above street expectations and Q1 is tracking similar upside.
RBC’s SMB ad checks remain constructive, with consumer softness falling significantly and AI tools unlocking incremental budget as TikTok pressure fades.
AI Overviews ads are fully flowing across Pmax and Search with stable conversion and TAM expansion.
Any ChatGPT-driven dislocation is seen as a buying opportunity.
RBC says RDDT feedback was weaker, citing low pricing, uneven conversion, and limited near-term impact from Max Campaigns, adding that any ChatGPT-driven dislocation in GOOGL is a buying opportunity while RDDT upside is more back-end weighted into
AI Mode feedback remains mixed.
Google is differentiating its AI retail strategy by monetizing through new ad formats rather than taking transaction fees, leveraging its existing 50-billion-product database to bypass data standardization hurdles.
The company is using purchase history and loyalty integrations to drive personalized sales.
The initial deal with Apple on underlying model technology is hoped to lead to the same kind of product integration that ChatGPT currently enjoys on iOS and macOS.
The agreement announced between Apple and Google is not exclusive, despite Elon Musk’s insinuation, leaving an opening for other models to contribute to Apple Intelligence in the background.
Google is expanding its AI chatbot shopping features by partnering with major retailers like Walmart and Shopify, enabling direct purchases within the Gemini app, which strengthens its position as a virtual merchant and assistant.
Google is introducing personalized advertising into its AI shopping tools to monetize its Gemini chatbot and gain market share against rivals like OpenAI.
The company possesses the strongest footprint across multiple layers of the AI technology stack, built on a decade of AI investments that have created deep competitive moats.
Easing regulatory pressure is expected to allow the company to better leverage its consumer and enterprise distribution, driving incremental upside.
Cantor upgraded the stock to Buy, stating that its decade-long AI investments have created deep competitive moats, positioning the company to benefit as AI adoption shifts from the 'Frenzy to the Synergy phase'.
The company unveiled a new AI Inbox for Gmail designed to provide a personalized overview of tasks and important updates, is launching AI Overviews in search, and a Grammarly-like 'Proofread' feature, while also bringing previously paid AI features to all users.
Gemini's market share has significantly increased over the past three months, indicating growing adoption and competitive strength in the generative AI space.
Google has successfully developed models that offer a reliable, cheap alternative to flashier rivals, demonstrating its ability to compete effectively in the AI market.
Google may soon have an unbeatable lead in the mobile market due to its AI, particularly through its arrangement with Samsung, which holds the top share of the global smartphone market.
Google's AI is expected to power Apple's Siri assistant on iPhones, further solidifying its position in the mobile market.
The permanence of Google's mobile AI advantage is uncertain, as its arrangement with Samsung is likely for only a few years, and a deal with Apple has not yet been finalized.
Google is successfully expanding the appeal of its TPUs as a viable alternative to Nvidia, engaging in high-value talks with Meta.
Google is lowering software barriers for TPU adoption by supporting PyTorch, making it easier for developers who do not know Jax.
Google's native programming language for TPUs, Jax, is less familiar to developers, which could slow adoption.
Futures flat but lots of movement underneath the surface with NVDA -4% and AMD -6%. The sell OpenAI levered names vs Buy GOOGL/TPU exposed names was in full force yesterday and likely continues today after TheInformation calling out META possibly buying TPU...
A clear rebound in advertising performance and accelerating AI-driven marketing initiatives.
TPU performance gains are narrowing the efficiency gap with Nvidia.
Superior commercial query performance compared to ChatGPT supports strong near-term search results.
Slow rollout of full AI-powered search and cautious scaling of AI Mode due to lower monetization present medium-term risks.
AI Overviews driving query growth and expanding the search market
Limited threat from ChatGPT compared to Google's massive user base
Potential shift of some informational queries to OpenAI
BNP downgraded the stock to Hold
Research through 2026-11-03 · 2025-06-27 to 2026-11-03 · 130 source reports.
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Research through 2026-11-03. Artifact validity does not establish factual accuracy or research freshness.