Is Wall Street Missing the Point on Google? Why the Tech Giant Could Be Primed for a Comeback
While the S&P 500 and Nasdaq are soaring to new heights, Alphabet’s stock has been conspicuously left behind, sparking widespread investor concern. Fears over AI disrupting its legendary search business are rampant. But a closer look reveals a different story: a besieged tech giant, trading at its lowest valuation in over a decade, may be quietly positioning itself for a powerful rebound.
While headlines focus on the threat from competitors like OpenAI’s ChatGPT, analysts like Michael Nathanson of MoffettNathanson argue the panic is already “priced in.” In a recent report, he noted that investors are “overlooking several emerging dynamics that could support Google’s competitive position and long-term monetization.”
Here’s why the narrative of Google’s decline might be premature.
1. The AI Fightback and a Surprising New Ally
Far from being a passive victim, Google has launched an all-out offensive to integrate generative AI across its ecosystem. Its recent I/O conference showcased a company leveraging its immense infrastructure and talent to close any product gaps with rivals. By embedding its new “AI Overviews” directly into search for its 1.5 billion users, Google is aggressively redefining its core product for a new era.
And in the ultimate plot twist, Google’s chief rival is becoming a key partner. In a stunning endorsement of its technological prowess, OpenAI has turned to Google Cloud for critical data center capacity. Even more significantly, reports indicate OpenAI will rent Google’s proprietary TPU accelerators—a major vote of confidence in Google’s AI infrastructure over competitors like Nvidia. This surprise deal transforms a competitor into a high-profile customer, potentially accelerating growth for Google’s cloud unit, which already saw revenues climb 28% in the first quarter.
2. Waymo: The “Wild Card” a-Coming into Its Own
For years, Wall Street has treated Google’s self-driving car unit, Waymo, as a costly science project. That view is rapidly becoming obsolete. Waymo is no longer a future promise; it’s a booming business hitting major milestones.
The autonomous ride-hailing service now completes 250,000 paid robotaxi rides per week and has served over 4 million fully autonomous rides across key U.S. cities. With aggressive expansion plans for Austin, Atlanta, and Miami, and a new development deal with Toyota, Waymo is a powerhouse in its own right—an asset whose massive potential has yet to be reflected in Google’s stock price.
3. A Historically Low Price for a Fortress of Innovation
Despite the external pressures from antitrust lawsuits and internal costs from a $75 billion investment in AI, Google’s fundamentals remain robust. The company holds a top-tier IBD Composite Rating of 90, and its core search and cloud businesses continue to grow.
For investors, this creates a rare opportunity. The combination of a historically low stock valuation, a proactive and aggressive AI strategy, and undervalued growth engines like Waymo and Cloud presents a powerful counter-narrative to the prevailing market anxiety.
While the stock chart shows a company under pressure, the pieces are in place for a significant rerating. For those willing to look beyond the headlines, Google may not be a company in decline, but a giant waking up.
