Google Cloud's operating profit margin has now exceeded 35%, reaching as high as 35.6%. Last quarter it was 32.9%, an increase of 2.7 percentage points. Who said cloud business isn't profitable? This is operating profit! It already accounts for depreciation, amortization, and other costs—this is now at the profit margin level of Amazon AWS! Turns out, cloud computing is incredibly lucrative. When Google Cloud hits $200 billion in revenue, this alone could contribute $70 billion in operating profit. By 2029 or 2030, it could easily surpass $300 billion in revenue, generating $100 billion in operating profit. By then, capital expenditures should stabilize or even decline, and free cash flow will be unleashed. Right now, it's still in the investment phase, so a moderate negative free cash flow is manageable, especially with Google Cloud driving revenue and Google's core business being strong enough. People are underestimating Google's strength—turns out major enterprises highly value Gemini, Google Cloud, and TPU's self-sufficiency, which reduces costs. 90% of Fortune 100 companies use the Gemini Enterprise edition, including Apple and Meta. Think about why that is. Stable, secure, large models that are easy to use, abundant computing power, and a full-stack application ecosystem—Google's competitive edge here is likely unmatched. Only Microsoft can compete with them. Amazon's application ecosystem isn't quite sufficient, and Microsoft is heavily tied to OpenAI. Both lack their own large models.