"Black Swan" strikes! Google's trillion-dollar market value faces scrutiny: How much are the remaining businesses worth if it loses Chrome?

According to Zhitong Finance APP, artificial intelligence startup Perplexity AI proposed on Tuesday to acquire Google's (GOOGL.US, GOOG.US) Chrome browser for $34.5 billion, marking a dramatic moment for the internet search giant, just one week before the celebration of its 20th anniversary of its IPO.

Even though analysts have not given much importance to this proposal, Perplexity's move still signifies a turning point. This is the first time an external entity has so publicly and explicitly attempted to divest a key business from Google. Currently, Google is awaiting a judge's ruling to determine whether it must undertake significant asset divestitures. Last year, a U.S. court ruled that Google holds a monopoly in its core search market.

This ruling is widely regarded as the most significant antitrust decision in the tech industry since the Microsoft case over twenty years ago. The U.S. Department of Justice has indicated that it is considering divestiture measures against Google as an antitrust remedy.

Shortly thereafter, the U.S. Department of Justice explicitly requested Google to divest the Chrome browser to create a fairer competitive environment for search competitors. Currently, Google bundles search and other services with the Chrome browser and pre-installs the browser on Chromebooks. Google’s Chief Legal Officer Kent Walker stated in response to the U.S. Department of Justice that its "practices would lead to unprecedented government overreach" and would undermine the U.S. efforts to maintain its economic and technological leadership.

As a decision on remedial measures is expected to be announced this month, investors are assessing the future value of Google and its parent company Alphabet. The company invests tens of billions of dollars annually in artificial intelligence infrastructure and services, while also facing the risk of consumers significantly reducing their time spent on traditional search, as ChatGPT and other AI-based alternatives provide new ways to access information.

Although most of Alphabet's revenue still comes from search-related advertising, the company has been diversifying over the past decade. October this year will mark the tenth anniversary of Alphabet's establishment as a holding company, with Google as its main subsidiary.

Sundar Pichai took over as CEO of Alphabet in December 2019. Under Pichai's leadership, Alphabet's market value has soared over 150%, reaching $2.5 trillion. Due to its increasingly solid position in the internet sector, Pichai and his team have had to continue seeking new growth areas, especially in artificial intelligence, while also facing a series of tough regulatory challenges from the U.S. and Europe.

Analysts have taken this opportunity to evaluate Alphabet's various businesses, partly considering that the company may be forced to take significant measures. Some even believe this could be a good thing for shareholders.

Analysts at DA Davidson stated, "We believe the only way forward for Alphabet is a complete divestiture, allowing investors to own the businesses they truly want." The following are some analysts' assessments of Alphabet's non-search major businesses:

Chrome

The Chrome browser is key to Alphabet's advertising business, which uses Chrome's data to assist in targeted advertising. Google launched the Chrome browser in 2008 with the aim of "creating value for users while driving web innovation."

Perplexity's valuation did not meet analysts' expectations but is still far above Perplexity's own valuation, which reached $18 billion in July. Perplexity is known for its AI-based search engine that provides concise answers to user queries. The company stated that investors are ready to pay this amount. However, the company did not disclose specific information about potential supporters.

Barclays analysts stated that the possibility of spinning off the Chrome business is a "black swan" risk and warned that if this occurs, Alphabet's stock price could drop by 15% to 25%. They estimate that Chrome contributes about 35% of Google's search revenue.

If a deal to acquire Chrome is reached, Raymond James analysts estimate the browser's value at $50 billion, based on 2.25 billion users and the revenue-sharing agreements Google has with smartphone manufacturers that pre-install the Chrome browser.

This aligns with the valuation of Chrome by DuckDuckGo's CEO Gabriel Weinberg. Weinberg testified in an antitrust lawsuit and stated in April that if a split were necessary, Chrome could sell for as much as $50 billion. His valuation is based on a "rough" calculation that primarily considers Chrome's user base.

Bob O'Donnell from market research firm TECHnalysis Research warned that the Chrome browser "cannot directly generate profit" as it is merely an entry service, and "from a purely profit perspective, it is difficult to determine how to measure it."

Google Cloud

Google's cloud business ranks third in the cloud infrastructure market, behind Amazon AWS and Microsoft Azure. It is one of Alphabet's main growth engines and the largest business outside of digital advertising.

Google officially launched the so-called Google Cloud Platform (GCP) in 2011, but it began aggressively entering the market about a decade ago. The department was renamed Google Cloud in 2016.

Like AWS and Azure, Google Cloud generates revenue from various enterprises (from startups to large corporations) that use Google's servers to run their workloads. Additionally, customers also purchase Google products such as Google Workspace.

In 2020, Google began to separately list its cloud business revenue in its financial statements. In the fourth quarter of 2020, Google first disclosed profit metrics for the department, which reported an operating loss of $1.24 billion The business achieved profitability in 2023 and is currently maintaining a good profit status. In the second quarter of 2025, Google reported an operating profit of $2.8 billion for its cloud business, with revenue of $13.6 billion. Chief Financial Officer Anat Ashkenazi stated during the earnings call that due to strong demand, the company's current backlog of cloud service orders (a measure of future committed revenue) has reached $106 billion.

In March of this year, Google agreed to acquire cloud security provider Wiz for $32 billion, marking the company's largest deal ever.

Wedbush Securities analysts valued Google's cloud computing business at $602 billion, while TD Cowen provided a valuation of approximately $549 billion in May. Raymond James gave a valuation of $579 billion.

DA Davidson analysts provided the highest valuation at $682 billion. DA Davidson and TD Cowen analysts noted that although Google Cloud still lags behind AWS and Azure, its growth rate is faster than AWS and has the potential for a higher valuation. This is mainly due to its artificial intelligence infrastructure, strong data analytics system, and the ability to attract more enterprise customers.

DA Davidson analysts stated in July that it would become "one of the best independent software stocks."

YouTube

Similar to Facebook's acquisition of Instagram for $1 billion in 2012, Google's $1.65 billion acquisition of YouTube in 2006 is considered one of the most successful acquisitions in internet company history.

YouTube is the largest video website on the internet and a significant part of Google's advertising business. In the second quarter, YouTube's advertising revenue grew by 13%, reaching $9.8 billion, accounting for 14% of Google's total advertising revenue.

However, analysts have significant disagreements regarding YouTube's valuation.

MoffettNathanson referred to YouTube as the "new media overlord," estimating its value between $475 billion and $550 billion, believing that YouTube is larger and more powerful than any other company in Hollywood. Based on the upper limit of this valuation range, YouTube's value accounts for about 22% of Alphabet's total value.

YouTube recently surpassed Netflix to become the most engaging streaming platform. Netflix has a market value of $515 billion.

TD Cowen analysts provided a much lower valuation of only $271 billion. The firm pointed out that YouTube is one of Google's six products with over 2 billion monthly active users, alongside Search, Google Maps, Gmail, Android, and Chrome. Raymond James estimated YouTube's valuation at $306 billion In 2024, YouTube's revenue reached $54.2 billion, making it the second-largest media company in the world, second only to Disney. YouTube's revenue sources include advertising and subscription services.

TD Cowen analysts stated in May that they expect this year's advertising revenue to rise by about 14% and anticipate that the sector will maintain a double-digit growth rate. Additionally, the subscription business is also growing rapidly, including YouTube TV, music, and NFL Sunday Ticket.

Waymo

The autonomous vehicle company Waymo is, so far, Alphabet's most notable success story outside of Google.

Waymo currently operates the largest fleet of autonomous ride-hailing vehicles in the United States, with over 1,500 cars and a total mileage exceeding 100 million miles. Competitors like Tesla and Amazon's Zoox are still testing in some markets.

When Alphabet was established as the parent company of Google, it created a category called "Other Bets," which included businesses referred to as "moonshot projects."

Waymo was spun off from Google in 2016 and included in the "Other Bets" category, but this category continues to incur losses of billions of dollars each year. In the second quarter, Alphabet's "Other Bets" lost $1.2 billion, with revenue of $373 million.

In the latest funding round last November, Waymo's valuation reached $45 billion. External investors in this round included Andreessen Horowitz, Tiger Global Management, Silver Lake Partners, Fidelity Investments, and the Public Investment Fund.

Some analysts believe that the current valuation of the sector is several times higher than its previous valuation. DA Davidson analysts estimated earlier this month that the sector's valuation could be $200 billion or more. Oppenheimer provided a benchmark valuation of $300 billion, assuming the sector's adjusted earnings reach $102 billion by 2040.

Raymond James values Waymo at $150 billion and predicts that the number of rides per week will reach 140 by 2027, climbing to 5.8 million by 2030. TD Cowen estimates the midpoint of Waymo's enterprise value at $60 billion.

Waymo stated that it currently provides over 250,000 paid rides per week in commercial operating markets such as Atlanta, Austin, Los Angeles, Phoenix, and San Francisco. The company indicated that it plans to expand its operations to other areas, including Philadelphia and Dallas