Summary
- Google Cloud is the pillar of my bull case: Q3 revenue $15.16B (up 34% YoY), $3.59B operating income (23.7% margin), with $155B backlog (up 46% sequentially).
- I see strong AI-led momentum, with GCP products growing faster than the total Cloud segment, mainly driven by the adoption of enterprise AI products.
- Ironwood (Gen-7 TPU) should soon be GA. In my view, it could credibly compete in large-scale inference, with validation from Anthropic’s expanded access to up to 1M TPUs.
- Valuation remains reasonable: Alphabet trades at ~27x next year’s earnings, second cheapest among hyperscalers despite stronger YTD performance.
hapabapa/iStock Editorial via Getty Images
I reiterate…
Summary
- Google Cloud is the pillar of my bull case: Q3 revenue $15.16B (up 34% YoY), $3.59B operating income (23.7% margin), with $155B backlog (up 46% sequentially).
- I see strong AI-led momentum, with GCP products growing faster than the total Cloud segment, mainly driven by the adoption of enterprise AI products.
- Ironwood (Gen-7 TPU) should soon be GA. In my view, it could credibly compete in large-scale inference, with validation from Anthropic’s expanded access to up to 1M TPUs.
- Valuation remains reasonable: Alphabet trades at ~27x next year’s earnings, second cheapest among hyperscalers despite stronger YTD performance.
hapabapa/iStock Editorial via Getty Images
I reiterate my bull case on Alphabet Inc. (GOOG)(GOOGL) after Q3 2025 earnings, with the Cloud segment’s clean beat and a larger capex plan setting the tone for 2026.
In my earnings preview coverage, I
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