Google Stock Intrinsic Value: Sven Carlin Sees 40 P/E, 'Priced for Perfection'

On July 4, 2026, Sven Carlin published a fresh intrinsic value analysis for Alphabet Inc. (GOOGL), the company he refers to as Google. He opens by noting the stock has done ‘really great over the last year and a half,’ rising from his own buy price around 100 to nearly 400. Despite that run, Carlin’s central argument is that today’s stock is overvalued: the market is pricing in roughly 15% annual earnings growth for a decade, which he calls ‘priced for perfection.’

To reach that conclusion, Carlin strips out what he views as a one-time income distortion. He says the real earnings power is far lower than the headline numbers suggest. That adjustment leads him to a true trailing price-to-earnings multiple of 40, and an intrinsic value calculation that sits at little more than half the current market price under his base-case assumptions.

Carlin argues that Alphabet’s reported Other Income is disguising the underlying profitability. He points to a $47 billion gain in the most recent quarter, compared with $11 billion in the same quarter a year earlier. The jump, he explains, comes from a valuation adjustment on Alphabet’s investment in Anthropic — a privately held AI company whose latest financing round in May reportedly valued it at $940 billion.

When Carlin annualizes that Other Income, he gets a $55 billion positive boost to Alphabet’s profits. Starting with $132 billion in profits over the last year, he adjusts for the quarterly Other Income swing and calculates total net profits of $160 billion. Removing that $55 billion Anthropic-related lift, true earnings are about $105 billion. That yields a true P/E ratio of 40, against the 26 that might appear using unadjusted figures. Carlin notes the distortion is set to grow: with Anthropic now at 14% of marketable securities, he expects ‘another plus 40 billion in the next Google earnings.’

Carlin walks through several numbers from the quarter to support his caution. On the revenue side, he cites 19% revenue growth, 60% cloud growth, 350 million paid subscriptions, and operating income still growing strongly. But he immediately flags a concern: capital expenditures are ‘booming,’ and trailing three-month free cash flow dropped to just $10 billion. He warns it could even turn negative compared with an earlier expected $100 billion.

Then he dives into the ‘Other income’ line item, which he says ‘skews everything.’ He shows that quarterly Other income of $47 billion — up from $11 billion — provides a $40 billion bonus to earnings. Extrapolating the trailing 12-month impact gives $55 billion of the $160 billion annualized profit figure. After removing that, the adjusted earnings are $105 billion, leading to his true P/E of 40.

He plugs these numbers into his intrinsic value table. With a base case of 12% earnings growth and a future P/E of 20, the intrinsic value is ‘a little bit more than half of the current stock price.’ Moving to a more exuberant 15% growth and a future P/E of 25, intrinsic value gets closer to the stock price. A margin-of-safety scenario with 86% growth (likely a reference to a hypothetical high-growth year) and a P/E of 15 produces a value at just 30% of the current price — the level where Google traded ‘just a few years ago.’ Carlin concludes the market is discounting 15% growth for the next decade.

Carlin does not dismiss Google’s operational momentum. He reminds viewers he was a buyer of Google at 100 and notes the stock has nearly quadrupled, validating his earlier ‘Google stock easily to 500 on AI’ comment made when the price was around 170. The business, he says, is delivering ‘staggering’ revenue growth, cloud tokens are expanding, and 350 million paid subscriptions show real monetization.

He also concedes a year ago there was a risk that ChatGPT might make search ‘go away,’ but that didn’t happen. The search franchise remained robust, and AI enthusiasm lifted the stock toward 400. However, Carlin frames these positives as already fully reflected in the price. The growth is great, but the current valuation leaves little room for error, which he captures with the phrase ‘priced for perfection.’

Carlin points to two forward-looking signals that could reshape the valuation picture. First, the Anthropic valuation effect is not over. Because the recent financing round happened in May, he expects another $40 billion increase in Other income in the next earnings report. Investors who rely on unadjusted earnings per share may see the reported P/E look even cheaper, while the adjusted multiple remains high.

Second, he extends the conversation to peer comparisons. He mentions Microsoft (MSFT) trades at a P/E of 23, roughly two times the value of Apple (AAPL) and Google in his table, ‘depending on what will happen in the future.’ He plans to update his intrinsic value template for Meta (META), Amazon (AMZN), Tesla (TSLA), and others next week. The implicit message: the entire mega-cap group’s earnings quality and growth expectations deserve a deeper look.