Google is down almost 20 percent from ATH and has entered bear market territory. my thesis

Google as the title states has gone down 20 percent from the ATH which is more than other big tech companies have seen. and is now in bear market territory. 

First let's start with the balance sheet of Google which is pretty good for the most part.  Google revenue has increased at a rate of 18.16 percent a year which is extremely fast top-line growth.  Free cash flow growth has been good but more and more is going towards capx while google tries to improve their LLM.  The free cash flow is also further hurt by their stock-based comp which last year counted for nearly 32 percent of all free cash flow. EPS is going up at a rate of 21 percent in the last 5 years which is being accelerated by google buying back shares.  They have minimal debt and lots of cash. they  have recently issued a dividend which is great because it returns more profits back to shareholders.

Why is google trading down so much

Google has recently found itself to be a convicted monopoly by the DOJ and is also seeing regulation from the EU as well in other anti monopoly lawsuits.  This has increased the level of uncertainty in the stock because the punishments have yet to be given leaving investors in limbo of how detrimental this could actually be.

Google as well as other big tech companies have been spending ungodly amounts of money chasing AI and while I do think AI could prove to be a worthwhile investment in the future in the short term this is causing companies like Google to not be as capital efficient as they once were.

What will cause google stock to go up

The thesis is simple…  Once time passes and we get past these anti-trust lawsuits the future from Google will seem more clear and this will help with investor sentiment and certainty and help contribute to an increase in stock price.  Google is currently spending money on a upgrade cycle which is AI.  Once the boom for AI starts to go down, capex spending should move down, allowing Google to return to a more capital efficient business model.  Also keep in mind that Google owns so many entities (YouTube, Google Cloud, Google Search, -google office suite, and android).

TLDR: Google stock is probably undervalued and its probably gonna go up lmao