@benzinga: DA Davidson analyst Gil Luria has proposed that Alphabet should contemplate splitting up Google’s various businesses to enhance its overall value. This recommendation comes amid Google’s struggle to retain its supremacy in the search engine market due to the rise of AI chatbots. Luria, in an interview with Yahoo Finance, has expressed that Google’s resistance to a breakup is contributing to its unusually low earnings multiple for a growth company. The U.S. Department of Justice has previously called on Google to divest its Chrome browser and advertising network and potentially its mobile Android division as well. Luria’s clients, a broad spectrum of institutional investors, are pushing for a “big bang breakup” rather than “isolated spinoffs”. Luria suggests that Google should divide its businesses into individually traded entities. According to Luria’s analysis, Google’s individual businesses would be valued much higher as separate entities. While Google’s market capitalization is currently less than $2 trillion, Luria estimates that the total value of Google’s businesses, when valued separately, would be $3.7 trillion. The analyst proposes that Google should separate YouTube, Search, Google Cloud, Waymo and its AI segments. He contends that Alphabet’s stock is currently trading at a historically low valuation—just 16 times its forward earnings—significantly below the overall market multiple. Luria also stated that Google’s individual businesses would trade at levels comparable to their peers, with Waymo comparable to Uber, Google Cloud to Snowflake, YouTube to Netflix and Google’s TPU business to Nvidia.

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