I basically stopped clicking Google links months ago. Their quarter just explained why that doesn't matter.
u/Aya_Research ·
Reddit — r/ValueInvesting
· July 23, 2026 at 03:56
· ⬆ 32 pts
· 💬 18 comments
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AI Summary
Summary
Author argues that despite users reducing clicks on Google search results (using AI answers instead), commercial-intent searches still generate ad revenue, explaining Google's strong search revenue growth.
They question the valuation ($4T+ with negative FCF and rising capex) and ask for a sum-of-parts analysis and data on monetizable click share.
The post is a well-reasoned, semi-researched reflection on Google’s business model transition to AI, but lacks formal financial modeling or explicit trade thesis.
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Like a lot of people, i've mostly stopped clicking through Google results. i read the AI answer and move on. by the old logic that should be killing their ads business.
then this quarter printed: queries at an all-time high, AI Mode past 1B monthly users, search revenue still up 17% to $63B. revenue beat, cloud grew 82%. and the stock sold off anyway, because the capex guide went up again ($195-205B for the year) and free cash flow went negative for the quarter.
trying to square that, here's where i landed: people like me were never the revenue. i read results and don't click ads. in the old world google made nothing off me, in the AI world it still makes nothing off me. the clicks the AI answers "stole" were mostly free riders. commercial-intent searches, flights, insurance, shopping, those still click, and that's where the money always was. so freeloaders going clickless costs less than it sounds, while the queries that do monetize keep growing.
second thing i keep chewing on: if the future is GEO instead of SEO, everyone optimizing to get recommended by google's AI instead of ranked by its index, the entry point stays google's. same gatekeeper, new door.
and the race framing matters. for OpenAI and Anthropic, winning is existential, they fund the war with fundraising rounds. google funds it with $63B a quarter of ad money. it's the only runner in the race that can afford to lose it.
what i can't settle is the price. north of $4T with negative FCF and a capex guide that keeps climbing is a lot to pay for "they survived the scariest question." two things i'd genuinely like input on: has anyone done a proper sum-of-parts at these levels? and is there any data on what share of google clicks were ever monetizable, or is my freeloader theory just me projecting my own habits?