Alphabet just had its worst day as a public company. BofA now values Google search at a lower multiple than fossil fuel stocks

Google search, the business that has funded Alphabet’s ambitions for two decades, is being valued at about 10 times earnings, according to Bank of America. That places the search business below the valuation multiple assigned to the energy sector.

How the valuation compares

The comparison highlights the relatively low multiple being applied to Google search. Bank of America’s estimate puts the business at roughly 10 times earnings, while the energy sector trades at 13 times, making it the cheapest sector in the market by that measure.

The broader S&P 500 trades at 18.7 times forward earnings, according to FactSet. Although the figures use different earnings measures, the cited benchmarks show Google search being valued below both the energy sector and the wider U.S. stock market.

Why it matters for Alphabet

Search has been central to Alphabet’s financial story, supporting the company’s expansion over the past 20 years. The valuation comparison therefore places a spotlight on how the market is pricing the business that has financed much of Alphabet’s growth and ambitions.

Alphabet’s shares also recorded their worst day as a public company, according to the provided report headline. The source does not provide the date, percentage decline or a specific explanation for that move.

Bottom line

Bank of America’s figures put Google search at a lower earnings multiple than energy stocks and the S&P 500 benchmark cited. The data underline the gap between the importance of search to Alphabet and the multiple currently assigned to the business.