Google’s stock had a sharp drop, with reports that the move wiped about $500 billion off the company’s market cap, down 12% in a day. Coverage described it as the biggest crash in Google’s history and the second biggest of all time, behind Nvidia’s drop after the DeepSeek news the year before. Tom’s first point is not to overreact.
He sees this as a buying opportunity for the business, just not necessarily at that moment. The underlying issue in the coverage is that more people are using Google than before, but they’re using the AI products instead of traditional search, and Google hasn’t yet monetized those AI queries as well as classic search. In his view that’s not a long-term problem. The company still has massive growth in model use among institutions and consumers, and over time it should be able to monetize that. The short is a case for patience, not for rushing in on the first down day.
Key points
- A sharp drop cut a large amount of Google’s market value in a single day, with reports putting the figure around $500 billion.
- Tom’s advice is not to overreact to a headline crash.
- The business issue is slower monetization of AI search, not a collapse in Google’s use or relevance.
- He sees a buying opportunity in the business, but not a reason to rush in immediately.
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