AI startup Perplexity has offered $34.5 billion to buy Alphabet’s (GOOGL) Chrome, aiming to tap into the browser’s billions of users, crucial to the AI search race. The offer has caught the market’s attention, but Wall Street remains skeptical. Broadly, the bid could face major hurdles, including a low valuation, Google’s firm control over its flagship browser, and regulatory uncertainties. GOOGL stock gained 1.16% on Tuesday.
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Perplexity’s offer comes at a time when Google is under growing pressure from regulators. Last year, Google lost an antitrust case, and the U.S. Department of Justice urged it to sell Chrome after a court found it held an unfair monopoly in internet search. If Chrome is forced to separate from Google, Perplexity could become a strong candidate to take over the popular browser.
Baird Analyst Weighs in on Perplexity’s Bid for Chrome
Despite the huge buzz, five-star-rated analyst Colin Sebastian at Robert W. Baird said Perplexity’s offer “vastly undervalues” Chrome, which he estimates is worth around $100 billion. Analysts at Baird dismissed the proposal, saying it “should not be taken seriously.”
Sebastian also believes a forced spinoff is unlikely, as it could harm users with lower-quality products and create challenges in separating Chrome from Google’s platform. He added that other solutions could also meet the court’s goals.
Sebastian has a Buy rating on GOOGL stock.
Is Google a Buy, Sell, or Hold?
Overall, on Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 27 Buys and nine Holds assigned in the past three months. The average GOOGL price target of $217.25 per share implies a 6.84% upside potential.
