---
title: "P/E ratio: Google 17, Amazon 21. Are they currently undervalued among the Magnificent Seven?"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/43141092.md"
description: ""It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price." In his early years, Old Bar followed his teacher Graham and preferred "cigar butt" investing—buying ordinary companies at cheap prices. Later, influenced by Munger, he shifted focus to company quality, willing to pay a fair price for excellent businesses. "Price is what you pay; value is what you get." The stock price paid and the intrinsic value obtained are two different things. The key to investment is ensuring that the price paid does not exceed its actual value. Even good companies need a good price, but a fair price is not necessarily the lowest price..."
datetime: "2026-08-02T06:02:10.000Z"
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  - [zh-CN](https://longbridge.com/zh-CN/topics/43141092.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/43141092.md)
author: "[小R老板](https://longbridge.com/en/profiles/20878866.md)"
---

# P/E ratio: Google 17, Amazon 21. Are they currently undervalued among the Magnificent Seven?

"Buying a wonderful company at a reasonable price is far superior to buying a mediocre company at a very high price."

In his early years, Old Ba followed his teacher Graham and preferred "cigar butt investing" — buying ordinary companies at cheap prices. Later, under the influence of Munger, he shifted focus, starting to emphasize company quality and willing to pay a reasonable price for excellent enterprises. "Price is what you pay, value is what you get." The stock price paid and the intrinsic value obtained are two different things; the key to investment is ensuring that the price paid does not exceed its actual value.

Good companies also need a good price, but a reasonable price does not equal the lowest price; rather, it is a price that is cost-effective relative to the company's long-term value. Recently, Old Ba made a large position purchase of Google at an average price of $350. The price was not the lowest; it dropped to $314 a few days ago, but has now rebounded to around $356. Consistent with Old Ba's preference for consumer goods investments, similar to Apple 🍎, Google's massive investment in AI infrastructure is slowly becoming a daily consumer product for people.$Berkshire Hathaway B(BRK.B.US)

An overview and historical percentile comparison of the latest valuations of the Tech Seven Giants.

## **Horizontal Comparison of Valuations of the Seven Giants (As of 2026-08-02)**

**Company**

**PE (TTM)**

**PE 5Y Low / Median / High**

**PE 10Y Median**

**PB**

**PB 5Y Low / Median**

**PS**

**PS 5Y Low / Median**

**Dividend Yield**

[Google](https://longbridge.app.wbrks.com/quote/GOOG.US) (GOOGL)

**17.8**

20.3 / 24.5 / 27.5

27.5

7.0

5.8 / 6.6

9.8

5.4 / 6.1

0.24%

[Amazon](https://longbridge.app.wbrks.com/quote/AMZN.US) (AMZN)

**21.6**

33.1 / 50.1 / 78.2

76.8

5.3

6.8 / 8.1

3.8

2.5 / 3.2

—

[Meta](https://longbridge.app.wbrks.com/quote/META.US) (META)

**20.8**

21.2 / 26.3 / 28.7

27.8

5.4

4.5 / 7.4

6.2

4.8 / 8.2

0.38%

[Microsoft](https://longbridge.app.wbrks.com/quote/MSFT.US) (MSFT)

**25.8**

27.0 / 33.7 / 36.6

32.4

7.8

10.0 / 11.5

10.4

9.9 / 12.0

0.77%

[NVIDIA](https://longbridge.app.wbrks.com/quote/NVDA.US) (NVDA)

**30.6**

44.7 / 59.8 / 80.2

52.1

25.0

23.7 / 35.7

19.2

19.8 / 25.3

0.14%

[Apple](https://longbridge.app.wbrks.com/quote/AAPL.US) (AAPL)

**35.0**

26.1 / 30.1 / 34.7

26.5

42.0

39.3 / 44.5

9.7

6.8 / 7.6

0.34%

[Tesla](https://longbridge.app.wbrks.com/quote/TSLA.US) (TSLA)

**307.1**

51.6 / 96.9 / 285.4

55.2

13.5

11.6 / 15.8

11.3

7.3 / 10.9

—

Sorted by PE from low to high: **Google < Meta < Amazon < Microsoft < NVIDIA < Apple < Tesla**.

## **Are Google and Amazon "Cheap"? — Need to Look at It in Two Layers**

### **Google: Indeed at a Historical Valuation Low**

-   The current PE of 17.8 is **below the lower bound of the 5-year range** (20.3) and far below the 10-year median (27.5). This represents a **rare valuation compression since Google's IPO**.
-   However, note that Google's PB (7.0) is already higher than the 5-year median (6.6), and PS (9.8) is also in the upper part of the 5-year range. This indicates that the low PE is not because "the market overall gave a low pricing," but because **recent earnings growth outpaced stock price gains** — EPS growth compressed the PE.
-   In other words, **Google's low PE is driven by "earning more," not by "stock price falling." But recent negative free cash flow (-$5.9 billion) and significant increases in capital expenditures are indeed concerning**.$Alphabet - C(GOOG.US)

### **Amazon: Larger PE Compression, but More Obvious Base Effect**

-   PE of 21.6 is below the 5-year lower bound (33.1) and less than one-third of the 10-year median (76.8). **On the surface, it appears extremely undervalued.**
-   However, Amazon has historically been a high PE company — with thin profit margins and high profit elasticity. The drop in PE from 70 to 20 mainly reflects profit release from AWS and advertising businesses, where a significantly raised profit base compressed the PE.
-   PB of 5.3 is at a 5-year low, while PS of 3.8 is slightly above the 1-year high — valuation signals are not entirely consistent. **The stock price surged by over 14% after the Q2 2026 earnings report, indicating that the market recognizes Amazon's current operational status**.$Amazon(AMZN.US)

### **Key Conclusion: Low PE ≠ Low Stock Price**

The phenomenon you observed is real — Google and Amazon's PEs are indeed the lowest among the Seven Giants and are at their own historical extremely low percentiles. However, the mechanism behind this is:

1.  **Profit growth speed exceeds stock price growth speed** → PE is passively compressed, which does not mean the stock price is undervalued
2.  **PE only measures current earnings, ignoring growth expectations** → If future earnings growth slows down, PE may not compress further
3.  **Different business models naturally correspond to different PE levels** → Amazon has historically had thin profits and high PE, while Google's advertising business has high profit margins but a clearer growth ceiling

Finally, good companies also need a good price. I am bullish on Google long-term, bullish on Amazon, and even more bullish on Old Ba's judgment.

Not investment advice

### Related Stocks

- [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md)
- [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md)
- [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md)
- [TSLA.US](https://longbridge.com/en/quote/TSLA.US.md)
- [BRK.B.US](https://longbridge.com/en/quote/BRK.B.US.md)
- [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md)
- [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md)
- [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md)
- [META.US](https://longbridge.com/en/quote/META.US.md)
- [AMZU.US](https://longbridge.com/en/quote/AMZU.US.md)
- [AAPB.US](https://longbridge.com/en/quote/AAPB.US.md)
- [AAPD.US](https://longbridge.com/en/quote/AAPD.US.md)
- [AAPU.US](https://longbridge.com/en/quote/AAPU.US.md)
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- [AAPY.US](https://longbridge.com/en/quote/AAPY.US.md)
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## Comments (25)

- **股指比严格1:3 · 2026-08-03T09:10:25.000Z · 👍 1**: Only Meta and Apple are tech companies with a P/E ratio that excludes AI revenue.
  - **小R老板** (2026-08-03T09:20:51.000Z): 👏🌹
- **一买就被套 · 2026-08-03T07:49:59.000Z · 👍 2**: Help, why can't I trade after setting up the 🪜?
  - **全村炒股希望** (2026-08-03T07:51:14.000Z): I'm using a Hong Kong SIM card.
- **幻想日进斗金 · 2026-08-03T02:27:03.000Z · 👍 3**: The analysis is great, but it's a pity that trading isn't possible right now.
  - **卖飞专业** (2026-08-03T02:27:33.000Z): Actually, having a 🇭🇰 card or using a 🪜 to enable global proxy is sufficient; give it a try.
- **John_Tang · 2026-08-03T01:59:53.000Z · 👍 2**: Google and Amazon's PE is around 30 (excluding investment income)
  - **相信国运投资美股** (2026-08-03T03:26:43.000Z): Bro, I feel like it's a bit off that the market cap is so large while the PE ratio is so low.
  - **John_Tang** (2026-08-03T07:00:07.000Z): None of them are cheap.
  - **股指比严格1:3** (2026-08-03T09:10:57.000Z): Only Meta is truly cheap inside; everything else is expensive.
- **奇迹的交易员cola · 2026-08-02T18:53:11.000Z · 👍 2**: Mark
- **韩跑跑的交易员Luka · 2026-08-02T09:35:42.000Z · 👍 6**: Mr. R, the low P/E of Google and Amazon is mainly due to the impact of one-time investment gains.
  - **小R老板** (2026-08-02T09:39:42.000Z): 👏👍
- **一发入魂 · 2026-08-02T09:18:13.000Z**: I get it, teacher. I'm going all-in with full margin on Google and Amazon right now 🤪
  - **小R老板** (2026-08-02T09:36:48.000Z): Don't be impulsive; it's safer to build your position in batches. Try to use minimal leverage.
  - **一发入魂** (2026-08-02T10:26:25.000Z): I've always just been all talk, often joking around with Cola Ge and Z Lao. I usually do it in batches, might also go long on calls, but it's really a long-term hold, acting as a substitute for holdin
  - **小R老板** (2026-08-02T11:10:52.000Z): 😅👍
- **目标5年内财富自由 · 2026-08-02T08:51:59.000Z · 👍 3**: You need to deduct SpaceX's shares from Google before calculating; it seems to be 23.
  - **小R老板** (2026-08-02T09:33:23.000Z): 👍
- **浩浩荡荡地 · 2026-08-02T08:39:57.000Z · 👍 1**: Teacher, buy the index, buy the index.
  - **小R老板** (2026-08-02T09:33:13.000Z): Domestic Alipay and WeChat are both doing regular investments
  - **浩浩荡荡地** (2026-08-02T09:44:20.000Z): That's good then, make big money
  - **小R老板** (2026-08-02T11:10:22.000Z): 😀