Some of the brightest minds in the world are employed by Introduction Alphabet( NASDAQGOOG )( NYSEGOL ), and they are well compensated. In 2021, Google Services had an operating income of$ 91, 855 million on$ 237, 529 million in revenue, but by 2022, that number had increased to$ 86,572 million with a revenue of$ 253, 528 million. According to the 2022 10 - K, the$ 5.3 billion decline in operating income was primarily brought on by rises in compensation costs and traffic acquisition costs( TAC ). Later in 2022, when Google's's payment reached record levels, ChatGPT was released. Google has stated that it is their mission to arrange the world's's tips since the 2016 10 - K. Many people were surprised that ChatGPT wasn't made available by Google because an artificial intelligence ( AI ) chatbot is a great way to organize information and connect people with it. My essay is that despite recent setbacks, Google is still a respectable business.
Before Google's's Bard different, Chatbot Comparisons ChatGPT was made available to the public, and many people believe it to be superior. I've've made some of my own comparisons, and these anecdotes' outcomes have varied. For one reference, I looked at Russia's's historic GDP. The war in Ukraine has been terrible, and it is unsettling that Russia, a nation with less than 3 % of the global GDP, can cause such unrest. I asked Bard and ChatGPT about how Russia's's Income has changed over time because I was interested, and both responses were helpful. After World War 2, it appears that Russia's's share of the global GDP was double digit, but this number has since decreased. The query and response with Bard are provided below.
The exact query applies to ChatGPT around.
Both bots did a good job of condensing the content so that I didn't have to search through numerous resources, like Wikipedia.
I discovered Bard to be more helpful than ChatGPT when I had a suggestion about plate tectonics. When the North American plate was a part of Pangea, California didn't occur. This is well explained in Keith Heyer Meldahl's's Rough-Hewn Land: A Geologic Journey from California to the Rocky Mountains.
California owes its very nature to the movement of the continent west. There was no California( or Oregon, Washington, northern British Columbia, or northern Mexico, for that matter ) before North America began to move north. Old ocean bed fragments were gathered against the continent's's prow to form the Golden State and to grow gold there as well.
Distance 149 for the Kindle
According to the method I questioned ChatGPT about it, the response was incorrect.
Bard asked the same question, but the chatbot's's response was accurate.
Sundar Pichai, the CEO of Google, reportedly spoke with the WSJ and said that the company is still in great shape despite ChatGPT being the first to go public.
There have been many times in our evolution where we haven't been the first to advertise something. We didn't create the initial search engine, computer, internet, function, or other products, and so on. Being in the lead therefore occasionally matters a lot. There are times when it is irrelevant.
These comments from CEO Pichai give me hope that Bard will advance rapidly in the coming years.
The WSJ demonstrates how rapidly mobile marketing has grown in the US since 2010.
The WSJ story continues by demonstrating Google's's decline in market share since 2015. Despite these setbacks, Google continues to dominate the market.
It is almost certain that Google's's market share for mobile marketing will continue to decline thanks to new technologies like ChatGPT. If the world continues to transition to digitalization more quickly than Google loses show, Google now stands a good chance of continuing to grow in revenue. According to the branding income figures, Google enjoyed great success between 2017 and 2022. In my opinion, they are always a respectable business in 2023. We've've seen the following revenue CAGRs for Google's's segments($ in millions ) in the five years since 2017.
a sliver
2017 earnings
2022 earnings
CAGR.
Investigation and other advertisements
$ 69, 811
$ 162, 450
18 % %
advertisements on YouTube
$ 8, 150
$ 29, 243
29 %.
System advertisements
$ 17, 616.
32, 780
13 %.
Google another
10, 914
$ 29, 055
22 %.
Sky.
$ 4, 056.
26. 280
45 %.
The biggest tone position was the fly from 2020 to 2021. I also like to look at these statistics in a way that shows each year separately because the CAGRs have not been easy.
Valuation Once more, Google Services had operating income of$ 86, 572 million in 2022, and I think the segment is worth 18 to 20 times that amount, implying a range of$ 1,560 to$ 1,730 billion when we round to the nearest$ 10 billion.
With the cloud business, Google shouldn't have lagged behind AWS by four decades, but late is better than previously. The sky industry is really different today than it was four years ago. This is demonstrated by comparing the operating costs associated with Google Cloud today to AWS ' working income, which was based on comparable sales levels four years ago.
millions of dollars
Google Cloud
Qtr Side
Using Google Cloud
Operating Income
Using Google Cloud
funding
AWS
Qtr Side
AWS,
Expenditure Profits
AWS.
sales
Dec. 2019
$( 1, 194 )
$ 2, 614
December 2015
$ 580.
$ 2, 405.
2020 March
($ 1, 730 )
$ 2, 777.
March 2016
$ 604.
$ 2, 566.
June 2020
$( 1, 426 ).
3, 007
June 2016
$ 718.
$ 2, 886.
September 2020
$( 1, 208 )
$ 3, 444
September 2016
$ 861.
$ 3, 231
Dec. 2020
$( 1, 243 )
3, 831
December 2016
$ 926.
3, 536
2021 March
$( 974 ).
$ 4, 047
March 2017
$ 890.
3, 661
Jun 2021
$( 591 ).
$ 4, 628
June 2017
$ 916.
$ 4, 100
September 2021
$( 644 ).
$ 4, 990
September 2017
$ 1, 171,
$ 4, 584.
Dec. 2021
$( 890 )
$ 5, 541
December 2017
$ 1, 354
$ 5, 113
2022 March
$( 931 ).
$ 5, 821
Tarnish 2018.
$ 1, 400
$ 5, 442
2022 June
$( 858 ).
$ 6, 276
June 2018
$ 1, 642
$ 6, 105
October 2022
$( 699 )
$ 6, 868
September 2018
$ 2, 077
$ 6, 679
Dec. 2022
$( 480 )
$ 7, 315
December 2018
$ 2, 177
$ 7,430.
($ 12, 868 )
159$ 61
$ 15, 316
$ 57, 738
The numbers below are astounding; press to expand! Based on total income of$ 61.2 billion, Google Cloud experienced accumulated operating costs of$ 13.2 billion from the fourth quarter to the four quarters. AWS had a four-year head start and, based on cumulative revenue of$ 57.7 billion, had cumulative operating income of$ 15.3 billion from the 4Q15 to the fourth quarter. This isn't good for Google on the one hand, but it also demonstrates that we are unlikely to see any fresh competitors at this late stage.
AWS had operating income of$ 22, 841 million in 2022 and revenue of$ 80, 096 million with a 28.5 % margin. For the immediate future, I believe they will have a higher operating margin than Google Cloud due to their first-mover opportunity. However, I can see Google Cloud eventually reaching an operating margin of 15 % to 20 %, and if we base that hypothetical margin on the$ 26, 280 million in 2022 revenue, we would be talking about operating income between$ 3.9 and$ 5.3 billion. We arrive at a valuation range of$ 70 to$ 105 billion by multiplying 18 to 20 times and rounding to the nearest$ 5 billion.
Here is a description of the parts' rating.
Google Services range in price from$ 1,560 to$ 1,730 billion.
Google Cloud costs between$ 70 and$ 105 billion.
Some Bets$ 0
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$ 1, 630 to$ 835 billion in total
The 2022 10 - K shows 5, 956 million A shares plus 883 million B shares for a total of 6, 839 million, which we multiply by the$ 106.44 share price of GOOGL on April 10 to get the partial consideration of$ 727.9 billion. Additionally, it displays 5, 968 million C shares, which we multiply by the$ 106.95 GOOG share price on April 10 to obtain the additional partial consideration of$ 638.3 billion. Together, these result in a market cap of$ 1, 366 billion. Given that the cash and marketable securities complete of$ 113.8 billion significantly outweigh some balance sheet factors, the enterprise value is significantly lower than the market cover. I think investors who are willing to keep the property for at least three years should buy it because it is below my assessment range.
