Google Cloud is expected to exceed expectations, with AI implementation

Google (Alphabet) is expected to show in its 29th earnings report that Cloud revenue exceeded expectations and AI implementation (such as Gemini Enterprise) is strong.

For TSMC (TSM) and NVIDIA (NVDA): Establishing a "new valuation anchor"
This is the script that "picks-and-shovels" stocks most want to hear.
• Eliminating "peak demand" concerns: TSM fell below 393 today, essentially due to worries that downstream giants (like Google) won't make money after spending heavily on equipment. If Cloud growth > 50%, it indicates that those Blackwell chips and custom TPUs (manufactured by TSMC) that Google bought have already translated into orders.
• Legitimacy of Capital Expenditure (Capex): Google guided for a massive $175-185 billion in spending for 2026. If Cloud shines, the market will view this investment as "demand-driven" rather than "blind competition."
• Target price increase: TSM is expected to directly reclaim $400 on this positive news and open a path to challenge $450; NVDA will kick off its May earnings preview rally early, stabilizing above $215 and looking towards $230.
AI Implementation: From "Cash Burn" to "Profit Generation"
AI implementation means Google's Gemini has deeply integrated into enterprise workflows and search advertising.
• Software monetization driving hardware premiums: When AI is no longer just a lab toy but a tool that can generate cash flow, the gross margin expectations for the entire semiconductor supply chain will be further elevated.
• Beneficial for Tesla (TSLA): Although not in the same sector, the success of Google's AI implementation will validate the possibility of "large model commercialization," thereby indirectly boosting the market's valuation premium for Tesla's FSD V13 subscription penetration rate and Robotaxi profitability.

Regarding the application level of Gemini 3.1 Pro (February 2026 release) and its underlying logic for Google's stock price, I'll lay it out plainly. Google's current situation is: its product capabilities have caught up with and even surpassed GPT-5 in specific dimensions, but the capital market is waiting for it to turn this "technical superiority" into "harvesting ability."

The true level of Gemini 3.1 Pro: The "trump card" in hand,
Don't be misled by previous negative news, Gemini in 2026 has evolved to this point:
• Native multimodal dominance: It is currently the only model on the market that truly achieves native fusion of audio/video/text. While GPT-5.4 still uses a "plugin-style" approach for video, Gemini can directly retrieve specific details from an hour-long video within one second.
• Moat in long context (1M-2M): This point is crucial for enterprise (Enterprise) applications. GPT still has a tendency to "forget the beginning after reading the end," while Gemini's Needle In A Haystack accuracy remains nearly 100% at the 200k-word level.
• Reasoning ability (ARC-AGI-2): This is a hard metric. Gemini 3.1 Pro scored 77.1% on the ARC-AGI-2 test, exceeding GPT-5.4's 73.3%. This means when dealing with novel logical problems never seen before, Google is now smarter.
Since it's so strong, why is the stock price still fluctuating?

• The "Search Self-Harm" Paradox: The stronger Gemini is, the better SGE (AI Search) performs, the less users need to click on ad links. Google's current stock price contains a concern of "fighting with both hands": the faster AI is implemented, the faster traditional ad revenue dies.
• Cost Black Hole: Reasoning at the level of Gemini 3.1 is very expensive. Although Google has custom TPUs (like v6P), profit margins (Margin) are still heavily pressured by these computing costs. This is why the market predicts this quarter's EPS will decline by 6% year-over-year.

If Cloud exceeds expectations and AI implementation proceeds as expected, Google could potentially surge to 370.