Google parent Alphabet (GOOG 4.04%) (GOOGL 3.99%) lost close to $150 billion in market cap in early trading on Wednesday. Disappointing growth for the company's Google Cloud unit in its fiscal 2023 third quarter caused some investors to head for the hills.

However, anyone listening closely to the Q3 earnings call Tuesday evening would have easily found reasons to be optimistic about the future. Here's what CEO Sundar Pichai just said that makes Google stock a no-brainer buy on the dip.

Gemini rising

Google Cloud generated revenue of $8.41 billion, up 22% year over year. However, analysts were looking for revenue of $8.64 billion.

While Alphabet CFO Ruth Porat talked in the Q3 call about how the growth rate reflected "the impact of customer optimization efforts" (i.e., reducing spending), Microsoft delivered stronger-than-expected revenue growth with its Azure cloud platform. 

Some investors could be concerned that Google Cloud is losing market share to Microsoft because of Azure's integration with OpenAI's GPT-4 generative AI model. Maybe that is happening, but Pichai mentioned one key development that holds the potential to soon turn things around.

When asked about the new Gemini AI model, Pichai replied that "the early results are very promising." He stated that Google will launch multiple next-generation AI models, with Gemini as the foundation "throughout 2024." Pichai said that Gemini will be used "immediately across all our products internally, as well as bringing it out to both developers and cloud customers through Vertex [Google Cloud's machine learning platform]."

Why is Gemini so important? It just might be the way Google leaves OpenAI and Microsoft in the dust. Research company SemiAnalysis reported that Gemini is already five times more powerful than the most advanced GPT-4 models available. It stated that, with Gemini, "the sleeping giant, Google, has woken up." 

A "possible path" to a new revenue source

Pichai also spoke in the Q3 earnings call about Google's experience so far with its AI-powered Search Generative Experience (SGE). He noted that user feedback has been positive.

Google is focusing on getting the user experience right. Pichai acknowledged that "there are areas to improve." However, he added that he's "pretty comfortable" with the progress. 

Advertising remains key to SGE, just as it is with the current version of Google Search. Pichai said that Google plans to "experiment with new formats to SGE that use generative AI to create relevant, high-quality ads customized to every step of the search journey."

Arguably, the most intriguing comment that Pichai made about the integration of generative AI with Google Search is that subscription models could be "a possible path" in the future. He compared the potential revenue-generating opportunities for AI with what the company has successfully done with YouTube.

This opens the door to an entirely new revenue source for Google. Microsoft and OpenAI have already implemented subscription models for their AI offerings. If Gemini lives up to expectations and serves as the base for SGE and other AI services, Google has a real shot at beating those two rivals at their own game.

Why Google stock is a no-brainer buy

There's one simple reason why Pichai's comments make Google stock a no-brainer buy on the dip: They underscore just how much the market overreacted to the company's Q3 update.

Think about it for a second. Alphabet lost in the ballpark of $150 billion in market cap because Google Cloud's revenue was $23 million below expectations. Sure, the miss fueled worries that Microsoft will clobber Google in the cloud services market. But Pichai's discussion about Gemini and the potential for AI subscription models bode well for his company's prospects.

Thanks to what I view as a highly overdone sell-off, Alphabet stock now trades at a forward earnings multiple that's well below all of its top AI rivals, including Microsoft. Investors who have written the company off in the past later regretted it. I suspect that history will repeat itself.