July 3 - Alphabet (GOOGL, Financial) could unlock massive shareholder value by spinning off its divisions, D.A. Davidson said in a Wednesday note.
The broker pegs Google Cloud Platform alone at about $56 per share, arguing that a full breakup would make GOOGL “the top mega‑cap pick,” according to the note. Analysts there compare GCP's feature set to a blend of Microsoft (MSFT, Financial), Snowflake (SNOW, Financial), CrowdStrike Holdings (CRWD, Financial), Cloudflare Inc (NET, Financial) and Nebius Group (NBIS, Financial). They forecast GCP revenue of roughly $55 billion this year.
D.A. Davidson highlights GCP's use of Google's Tensor Processing Units alongside Nvidia (NVDA, Financial) architecture as a cost edge for AI workloads. Despite seasonal softness in June, developer activity remains strong across Compute Engine, Vertex (VRTX, Financial), BigQuery and Cloud Storage. A potential Wiz security acquisition could further strengthen GCP's competitive position.
In sum‑of‑the‑parts analysis, D.A. Davidson values a fully separated Alphabet at about $312 per share. Yet the firm keeps its 12‑month target for GOOGL at $160, noting uncertainty over any structural overhaul. Investors will be watching whether Alphabet's management moves to unlock this latent value.
