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Google Lost $9.5 Billion Overnight. Buy!

At its current rate, Google's capital spending is approaching that of Intel (INTC), a $13 billion annual bill that spooked investors when it was announced last year.

If Google can keep up this pace during 2014, it will be investing faster than AT&T's (T) vaunted "Project Velocity," a wired and wireless network expansion announced at $14 billion in extra spending over three years

Despite this, Google continues to bring about $1 of every $5 in revenue to its bottom line. Its $7.14 billion debt load at the end of September was matched with $15.2 billion in cash, with $82.9 billion in equity. By contrast, Verizon (VZ) carries $1 in debt for every $2.40 in equity; and AT&T carries 80 cents in debt for each $1 in equity. Intel had $13.5 billion in debt against $20.1 billion in cash last quarter.

More important, Google has been proactive in the Lenovo deal, not reactive. IBM walked away from a deal with Lenovo last spring, then settled this month for less than Lenovo's original bid. Google took an offer that looks bad on the surface, but likely would have been lower six months from now.

With this deal Google CEO Larry Page has defined himself as a decisive leader, willing to cut losses, and to focus on what will make his company money. At age 40, he rules American technology. That's the kind of leader you can bet on for the long run.

At the time of publication the author owned shares of GOOG and AAPL, but none of the other stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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