From Barchart: 2025-05-12 07:36:00

A new note from DA Davidson suggests a full-scale breakup of Alphabet (GOOGL) could resolve its valuation discount, creating pure-play leaders in search, video, cloud, AI, and hardware.

Alphabet’s conglomerate discount, trading at 16× forward earnings, lumps diverse units into a single multiple tied to Search’s mature margins.

Regulatory pressure could lead to divestitures that fail to unlock standalone value, while missed AI profits benefit other companies instead of Alphabet.

DA Davidson proposes separate public companies for Search & Ads, YouTube Streaming, Cloud & AI Infrastructure, Hardware & Edge AI, and Mobility & Urban Tech.

Isolating high-growth businesses could boost market capitalization, with a sum-of-the-parts valuation at $243 per share today and potentially rising to $300.

Investors should watch for signals from Alphabet founders, regulatory developments, and upcoming earnings reports for standalone performance metrics.

By quantifying business value and monitoring regulatory developments, investors can assess the likelihood of Alphabet’s management initiating the “big-bang” breakup to unlock its true worth.



Read more at Barchart:: DA Davidson Calls for “Big-Bang” Breakup to Unleas…