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Google’s Exuberant Valuation & Justification!

Value Investing with Sven Carlin, Ph.D.•Jul 15, 2026

Summary

Sven examines the psychological shift in the market regarding Google, noting that as the stock price has risen, the narrative has transitioned from extreme pessimism to irrational exuberance. Sven highlights how investors are now attempting to justify the high market capitalization by assigning massive values to Google's stakes in external companies like SpaceX, Anthropic, and Waymo. Sven disputes these valuations, suggesting that for the average shareholder, the practical value of these stakes is currently near zero and does not offset the premium on the stock.

Sven emphasizes that the higher a stock price climbs, the more speculative the narrative becomes, a behavioral trap Sven warns investors to avoid. Sven uses the current price levels to illustrate that the market is pricing in a level of success that is statistically improbable. Sven points out that even with aggressive assumptions, the math behind the current valuation does not align with traditional value investing principles.

Google (GOOGL): Sven observes that Google's stock price currently reflects a level of exuberance that requires a 15% annual growth rate over the next decade just to potentially justify the valuation. Sven finds this scenario highly unlikely and warns that even with such staggering growth, the company's fundamentals are still far from justifying the current market price. Sven concludes that the stock has become too expensive for value investors, as the current narrative ignores the necessity of sustainable, realistic growth and instead relies on speculative sentiment.

Mentioned Stocks

GOOGL
Sentiment: SELL

Reasoning: Sven explains that Google's valuation is currently 'too exuberant' and requires a 15% growth rate per year for a full decade to even begin to justify the current price. Sven dismisses the high valuations placed on Google's stakes in SpaceX and Waymo as part of a 'crazy' narrative that develops when stock prices rise. Sven maintains that the current stock price is far beyond what can be justified by intrinsic value calculations.

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