Summary:
Google has positioned itself behind their concept of mass investment + strategic partnership to power their AI development and infrastructure. Their ad services follows closely behind while their main focus in the mobile phone market is controlling the Android ecosystem, making strategic entries with Pixel units while attempting to innovate with their aging YouTube platform to keep up with other streaming/video publishing rivals.
Google has committed billions to fund a global data system and position data hubs worldwide to link multi-cloud environments into what they hope could be a seamless AI driven environment. Global hubs currently in use or recently greenlit in Europe, US and Asia territories are greenlit specifically for this function. Additional contracts have been signed with "in-place" companies once used or greenlit for crypto-mining are seeing the appeal of having their assets flipped and have been making contracts with AI driven companies adding to the pressure of securing or building resources to match their competitors.
Google continues to drive the Android mobile phone platform forward with a diverse number of mobile phone companies developing and adapting the mOS to match their evolving innovations in hardware. The Google App store continues to thrive with applications, games and more.
Headwinds:
Supply chain and labor shortages become the main physical bottleneck when it comes to AI and data centers. Component and material shortages have already begun to materialize and in some regions the lack of skilled labor to construct datacenters and infrastructure delay timetables adding to costs. Continued legal disputes between Google and YouTube's parent company and various countries abroad also continue to cast murky shadows over the companies various revenue streams be it their appstore, hardware related, ad services, browser related or their search engine.
12-month "fair value" forecast:
Though heavily invested and funding development, construction and implementation of these various segments, Google's presence remains at the forefront in all conversations along with competitors like NVIDIA, Microsoft and Amazon. Their committed and competitive edge which extends to a more friendly extent than other companies, provide them with a modest 15% p.a. outlook.
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Disclaimer
The user MarkoVT has a position in NasdaqGS:GOOGL. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
