1.24 trillion dollars is Google’s current market cap.
Just a few days ago, it was 1.35 trillion.

Google has lost over 100 billion in its valuation in just a day over the report the profit margins have fallen 20%

For some fast financials on Google.

257.6 billion dollars was the revenue in 2021.
76 billion dollars was the profit.

A 29.5% margin.

Just to add some perspective on that, the average net profit on companies currently in the S&P 500 is 12.3%. Apple, also had a 25.9% margin last year, making 94.7 billion dollars on 365.8 billion in revenue.

Google last year had a profit margin 14% higher than Apple and around 2.5x the average S&P company.

The big question though is why are margins falling now?

Looking to 2019 as an example, here was the basics on Google’s financials.

161.8 billion was the revenue.
34.3 billion was the profit.
A 21.2% margin.

This explains why Google’s profit dropped pretty simple.

Google grew 59.6% in revenue from 2019 to 2021.
Profit grew 44.7%.

This was a rapid growth, largely due to a COVID, with online advertising and other services having irregular growth.

This was also higher over the 46.3% growth Google had from 2017 to 2019 in revenue.

Easy answer, but real question is this.

Is a profit margin drop worth Google’s stock losses?

My feeling is ultimately no.

Margins this year will still be around the same if not slightly higher than Apple and Google will have more revenue, with more diverse streams more than before.

This 100 billion dollar crisis the media is talking about isn’t such a huge deal.