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Investing.com -- DA Davidson said in a note to clients on Tuesday that Alphabet’s (NASDAQ:GOOGL) Waymo unit could be worth more than $200 billion as a standalone company, citing comparisons with Tesla’s robotaxi ambitions and urging a breakup of Alphabet to unlock shareholder value.
“We continue to believe the only way forward for Alphabet is a complete breakup that would allow investors to own the businesses they actually want — the top competitors to NFLX, AWS/Azure, NVDA, OpenAI, TTD and TSLA,” wrote the firm.
They added: “We believe Waymo could be worth >$200B or $16/share,” using Tesla’s current $1 trillion valuation as a benchmark.
DA Davidson said much of Tesla’s value is “derived from Robotaxi,” which has “trivial revenue,” while Waymo could generate over $700 million in 2026 from a 3,500-vehicle fleet.
The analysts argued that Waymo has “essentially validated” its prior-heavy autonomous driving stack, now operating more than 1,500 cars in four U.S. cities.
“While the posterior-heavy approach taken by Tesla (NASDAQ:TSLA) is compelling, we believe there is sufficient room for both to flourish,” they added.
DA Davidson maintained its Neutral rating on Alphabet, but said it would see the company as “the top mega cap pick if it proceeded with a complete break-up.”
The firm cited rising investor frustration over underperformance in Search, Cloud, and advertising relative to peers, and said Alphabet’s current multiple of 18x earnings could pressure the board to act.
“As this underperformance continues, shares will remain depressed and the imperative for a breakup will increase,” the analysts wrote. They added: “Every month GOOGL trades at 18x earnings we are a little closer to the board making the right decision.”