u/investorinvestor ·
Reddit — r/ValueInvesting
· August 16, 2026 at 06:19
· ⬆ 60 pts
· 💬 38 comments
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AI Summary
Summary
Post argues GOOG is poised to repeat Apple’s post-Buffett earnings growth story, using PE and earnings yield math.
Author’s thesis: at ~25x normalized PE and ~20% EPS growth, GOOG’s earnings yield could rise from 4% to 25% in a decade.
Quality assessment: Reasoned but speculative; it is a simplified comparative valuation thesis, not deep fundamental DD.
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Comments38
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▶ Full Post Text
Buffett famously invested in Apple at around 16x PE. That’s an initial earnings yield of 6.25% right off the bat. Since then, AAPL has gone on to increase its EPS from around $2.16 per share to $8.71 per share, a 4x increase. This means his initial earnings yield of 6.25% has increased to 25% in 10 years! And it will continue to increase going forward.
So how does this compare to GOOG? Well, Google is in the fortunate position to be growing its earnings (or at least EPS) by around 20% per annum. Going by his 13-F’s, Buffett’s investment in GOOG would likely have been made around 25x PE normalized. If we do the math, this means Google will likely be able to increase its earnings yield from 4% to 25% over the next 10 years (1/25 x 1.20\^10). That’s another AAPL over there!
Author compares GOOG’s ~25x PE and ~20% EPS growth to Buffett’s AAPL buy at 16x PE, which led to 4x EPS growth. If GOOG sustains ~20% EPS growth, its earnings yield compounds rapidly, creating a long-term compounding opportunity. GOOG could be an “AAPL-like” compounder, justifying a long-term buy at current valuation. Growth may decelerate, AI capex pressures margins, or regulatory/antitrust actions could hurt the core business.
This Reddit post, published August 16, 2026,
features u/investorinvestor
discussing GOOG.
1 trade idea extracted by AI with direction and confidence scoring.