Analyst Explains How Alphabet Stock Can Double – ‘The Only Way Forward for Google’

Gil Luria, D.A. Davidson analyst, said in a recent program on CNBC that the “only way” for Alphabet to unlock shareholder value is to spin off its businesses. Luria believes Alphabet Inc. (NASDAQ:GOOG)’s search business will continue to keep the stock’s valuation limited amid challenges.

“The only way forward for Google is to do a big bang breakup—so spin off the ad network, spin off the cloud, the AI business with or without the TPU business, spin off the TPU business, spin off YouTube,” Luria said. “That’s the only way shareholders will get the full value of these businesses. Because search is so overwhelming, the stock is just trading at 16 times earnings. It’s an untenable situation. They need to isolate the search business. It’s controversial. They’ll continue to trade it at 16 times. The other businesses are going to trade at 50 times. They’ll trade at 10 times revenue. And that’s how the stock can double. All the management team has to do is move forward on that kind of plan.”

A laptop and phone open to Google’s services in an everyday setting.

ClearBridge Large Cap Value Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:

“Weakness in communication services was driven primarily by Alphabet Inc. (NASDAQ:GOOG), which traded lower as the market rotated out of AI leaders. Part of the decline followed the unveiling of Chinese AI startup DeepSeek, whose new foundational and reasoning models — reportedly offering similar performance to leading U.S. models at lower compute costs — triggered a broader selloff in the AI ecosystem. Additionally, concerns are rising that Alphabet’s dominance in search could be challenged by startups like OpenAI or large platforms like Meta Platforms, which may leverage their AI capabilities to enter the search market. While Alphabet remains a highly cash-generative business trading at a reasonable multiple, we reduced our position during the quarter due to the increasing competition in its core business.”

While we acknowledge the potential of GOOG, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than GOOG and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.