Why The Market Is Re-Rating Google Stock | Trefis

Google (GOOGL) stock currently trades near $402. Based on an expected 2026 EPS of $14.22, the stock carries a forward P/E multiple of 28x. This multiple represents a 35% premium over its five-year historical average forward P/E of 21x. Comparatively, Google stock sits between Microsoft (MSFT) at 24x and Amazon (AMZN) at 31x, while remaining more expensive than Meta Platforms (META) at 19x. (See Google’s valuation comparison with its peers). The critical insight is structural. The 153% stock surge over the past year is not merely the result of an earnings beat. The market has re-rated Google from a mature advertising platform to a dominant infrastructure provider for the artificial intelligence era, effectively paying a premium for durable future growth rather than just present cash flow.

The Backlog Efficiency

A primary justification for this elevated 28x multiple is driven by Google Cloud execution. In Q1 2026, the Cloud segment delivered…