Why Analysts Say a Chrome Divestiture Could Hurt Alphabet (GOOGL)

Alphabet Inc. (NASDAQ:GOOGL) is one of the Must-Watch AI Stocks on Wall Street. On August 13, Cantor Fitzgerald analyst Deepak Mathivanan reiterated a Neutral rating on the stock with a $201.00 price target. The rating affirmation comes amid reports of an unsolicited acquisition bid from Perplexity for its Chrome browser.

The firm believes that a Chrome divestiture could lead to “material value destruction” for Alphabet both financially and operationally.

“Press sources reported that Perplexity has submitted an unsolicited bid to acquire Chrome browser from GOOGL for $34.5B… Although GOOGL doesn’t monetize Chrome directly, the value of the asset to GOOGL is very significant… Assuming Chrome as a standalone entity hypothetically captures 25% of current monetization, we believe Chrome could be generating $10-11B in EBIT and potentially valued near $140B at 15x PE."

Smartphone with stock charts "The bigger takeaway is that Chrome divestiture could lead to material value destruction for GOOGL both financially and operationally… The investment community continues to wait for the remedy ruling from Judge Mehta in the US vs. GOOGL Antitrust trial. Among the remedies proposed by the DOJ, we continue to believe that Chrome divestiture is likely to be the most disruptive for GOOGL in the medium to long term but also the least likely to be included in the ruling.”

Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.

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