The issue with Google.

Google is one of my biggest holdings and I’ve done well with it. The stock is trading at a reasonable forward PE and many have praised the stock for being one of the few decent values, especially when it comes to big tech which is overrun by overvaluations.

However, the more that I think about Google’s position, the more concerned I become with its predictability. 73% of its revenue comes from search advertising.

This was all well and good when Google only had to compete with Microsoft. Now they are competing with far more — ChatGPT, Anthropic, xAI, Deepseek, Perplexity, and the list goes on and on. Many of these LLM’s performs search void of advertising. We can have a separate discussion whether this is sustainable or not, but Google has some serious competition.

In the long run, I think Google will be able to pivot and grow other sectors of their business eventually. Their cloud business is a great example. But in the short to medium term, their largest cash cow is in peril. And although they enjoy controlling the internet’s “gateways” (Android, Chrome, Google.com), the ubiquity of OpenAI’s ChatGPT is eating away at their market share.

In the short term, I don’t feel as bullish. I am trimming some of my Google share.

Does anyone feel the same? Or if you think I’m wrong, I’d love to hear it.