YouTube Is A Growing Revenue Driver For Alphabet, BofA Says

Alphabet Inc. GOOGL surprised the Street after reporting that YouTube Premium and YouTube TV had over 20 million and 2 million subscribers, respectively, in the fourth quarter, according to BofA Securities.

The Alphabet Analyst: Justin Post maintained a Buy rating on Alphabet with a $1,610 price target. 

The Alphabet Takeaways: Alphabet has revenue potential of $18 billion by 2025 as a result of rapid subscription growth, Post said in a Monday note. (See his track record here.)

YouTube TV is expected to become a growth driver in the non-subscription business segment, the analyst said. 

Third-party estimates suggested that 22 million households would switch to internet protocol television between 2019 and 2025, he said. 

"We conservatively estimate YouTube TV could capture around 25% share of these households by 2025, growing to roughly 6% of U.S. households."

Post gave the stock a potential 2025 valuation of $88 billion, from $26 billion today.

GOOGL Price Action: Class A Alphabet shares were trading 2.12% higher at $1,549.07 at last check Monday.