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GOOGL · Forward model · YouTube ads · Bear case

What has to happen in YouTube ads

Model as of

This page changes YouTube ads inside the complete GOOGL model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

GOOGL forward model
Horizon
Consolidated fair value $113.15 all other verticals held in this portfolio case
Final-quarter revenue $10.05B 8% of company revenue
Explicit segment contribution $47.46B EBITDA less segment capex, before corporate items

Search AI substitutes for queries, Cloud utilisation misses the $514B backlog, and capex stays elevated into 2028. What this case does NOT assume is a Chrome divestiture or a collapse of YouTube. It says 2026 was the peak growth year and the build does not earn its cost of capital.

YouTube ads

Basis quarter$11.05B
Final quarter$10.05B
Implied CAGR−2%
Final revenue mix8%

Advertising on YouTube. $11,055M in the basis quarter, +13%. Direct response and brand, with living-room strength. Watch time is not a quarterly ARPU series, so the driver is sequential growth on the disclosed line.

Last four quarters
2025 Q3 $10.26B Reported
2025 Q4 $11.38B Reported
2026 Q1 $9.88B Reported
2026 Q2 $11.05B Reported
YouTube in-stream and Shorts adsYouTube TV advertisingDirect-response and brand
Sequential growth +3.0%/qtr decaying toward +1.5% Q2/Q1 was +12% on seasonality. 3% is about the +13% YoY, not a World Cup repeat.
YouTube ads

Latest: $10.05B (2031Q2E)

Period Value
2025Q1 $8.93B
2025Q2 $9.80B
2025Q3 $10.26B
2025Q4 $11.38B
2026Q1 $9.88B
2026Q2 $11.05B
2026Q3E $11.10B
2026Q4E $11.13B
2027Q1E $11.14B
2027Q2E $11.14B
2027Q3E $11.12B
2027Q4E $11.09B
2028Q1E $11.05B
2028Q2E $11.00B
2028Q3E $10.94B
2028Q4E $10.88B
2029Q1E $10.81B
2029Q2E $10.74B
2029Q3E $10.66B
2029Q4E $10.58B
2030Q1E $10.50B
2030Q2E $10.41B
2030Q3E $10.32B
2030Q4E $10.23B
2031Q1E $10.14B
2031Q2E $10.05B

Assumptions & reasoning

  • YouTube ads are not YouTube the franchise. Subscriptions sit on the other Services line. FY2025 YouTube ads-plus-subs exceeded $60B; that mix is not a vertical here.
  • Q2 included World Cup viewership (1.7B unique viewers in the CEO quote). Opening 3% does not assume another event of that size.
  • Same Services operating-income limitation as Search: 44% EBITDA is assumed because Alphabet does not split the P&L.
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