Google's P/E still around 25. Historical comparison. What am I missing?

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Alphabet Inc. (GOOGL) has a price-to-earnings (P/E) ratio of ~25

Average P/E ratio for the “Internet & Information” industry is ~33

In comparison,

  • Microsoft (MSFT): P/E ratio of 34
  • Apple (AAPL): P/E ratio of 39
  • Amazon (AMZN): P/E ratio of 47
  • Meta Platforms (META): P/E ratio of 28

What am I missing. Why is google’s P/E ratio always this low? Here’s a chart for comparison from 2010.

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I guess it has more to do with ChatGPT and dominance of other players in AI industry. Google seems far behind in the race. Right now they get search revenue but perplexity and other AI based search engines are replacing it very fast. I spend more time searching via ChatGPT or perplexity instead of Google. It gives much better results.

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Everything that other players have to offer in AI is nothing that Google doesn’t have. I think Google’s distribution will outperform the competition in long run. Plus quantum supremacy is going to play a big role in creating new advanced AI models.

There comes a time for a company when it is thrashed badly on the wave of negative sentiments, only to rise above it and give extraordinary returns. That’s what Google is going through in my opinion.

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Google still seems like a good buying opportunity right now. Given YouTube’s revenue hits $50 billion a year.

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