What would Alphabet be worth if it were broken up into parts? According to TD Cowen, significantly more money than it is worth now.
On Monday, analyst John Blackledge valued each of Alphabet’s businesses as if they were separated from the company. “Ongoing legal action opens up Alphabet to a wide range of potential longer-term remedies, including separation of one or more of its businesses,” he wrote. “As a result, we expect investors to increasingly focus on biz segment valuations.”
Early in August, Alphabet lost its antitrust case against the U.S. government. Judge Amit P. Mehta of the U.S. District Court for the District of Columbia ruled that Google’s search engine is a monopoly and engaged in anticompetitive behaviors to “maintain its monopoly.”
Bloomberg and the New York Times also reported later that the Justice Department is considering asking the judge to break up Google.
In total, the aggregate value of all of Alphabet’s businesses is $2.9 trillion, according to Blackledge’s midpoint base model.
According to Blackledge, Alphabet’s Search business is worth $1.7 trillion, YouTube is worth $252 billion, Google Network is worth $78 billion, Google Cloud is worth $432 billion, and Google Subscriptions/Platforms/Devices is worth $158 billion. With search worth $1.7 trillion, that means the sum of the other businesses is $1.2 trillion.
Total equity value equates to about $247 per share versus the current $164.74 stock price, according to TD Cowen’s analysis.
Of course, any breakup would take a long time to happen, if it happens at all. TD Cowen expects the judge to make a remedies ruling in the second quarter of 2025. Alphabet has also vowed to appeal, making the eventual outcome likely years away.