Alphabet Inc. (NASDAQ: GOOGL) may still be called Google by most of us. Regardless of how you feel about the name change and restructuring that gave its founders absolute control for years into the future, the reality is that what seemed like an expensive $1.65 billion for YouTube has now been proven to be quite cheap.

Here is another crazy metric for the deal that was announced back in 2006. YouTube already may be a business generating $12 billion in revenues. Even more importantly, Google’s standalone valuation for YouTube could be $90 billion or more!

24/7 Wall St. has seen many crazy valuations on both the upside and the downside, for what this $1.65 billion YouTube acquisition is really worth today. After seeing a fresh Merrill Lynch report, most investors and outsiders are likely to take a different view on how to value YouTube.

Justin Post, the Merrill Lynch analyst who covers Alphabet, has raised his estimates for the company based on strong YouTube revenues. In fact, Post now forecasts that YouTube likely will cross the $10 billion mark in revenue as soon as 2016. Yes, this year!

Merrill Lynch has a Buy rating on Alphabet, and the firm’s price objective is $925. If this is correct, that represents upside of more than 26%, and it is an above-consensus estimate.

YouTube’s momentum is being called a key driver of Google-owned website growth. Alphabet does not make many disclosures on individual revenue sources inside of its owned websites. Post has upped his targets for YouTube pretty much across the board: its market size, the number of users and total views. Also boosted was the Merrill Lynch forecast on revenue and market share, as well as operating income, EBITDA and standalone valuation analysis.

Merrill Lynch now projects that YouTube will add four points of growth to Google Website revenues in 2016, which will help to offset an expected  deceleration in search. The firm also thinks that pressure will build on Google to start disclosing what the actual YouTube revenues happen to be.

With video on fire, the secular shift within internet usage continues to march forward. The firm cited Cisco Systems showing that internet video views doubled from 2015 to 2016 and that video will account for 80% of all mobile internet traffic by 2019. Justin Post said:

Google indicated growth in watch time on YouTube has accelerated and is up at least 50% year over year for three straight years. We believe video advertising will follow usage, and global online video advertising spending is expected to increase $19 billion from 2015 to 2018 (per Magna Global) to reach $35 billion, creating a big opportunity for video content platforms (Facebook, Snapchat, etc).

Merrill Lynch now forecasts that Google will have $12 billion in 2016 revenues alone, as well as revenues of $20.4 billion by 2018. Merrill Lynch previously had forecast $10.4 billion in 2016 revenue.

As far as what this all means, the Thomson First Call consensus estimate for 2018 revenues for the whole company is over $115 billion in 2018 — and almost $129 billion in 2019.

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Google may not break out its site-by-site numbers, but it has said that 2015 that partner revenue was up 50% over the past three years. Based on online video ad market growth being driven by new content, and by faster Internet speeds and increasing mobile usage, Merrill Lynch now suggests that there were 57% incremental gross margin and 18% incremental operating margin in 2015.

Where these numbers get really large is that Merrill lynch now believes that a stand-alone valuation potential for YouTube may be as much as $90 billion. On this aspect, Post’s report says:

We remain bullish on Alphabet as YouTube provides exposure to the rapidly growing online video market. Assuming a 5.7x revenue multiple (in-line with Facebook, LinkedIn, Twitter) on 2017, we get to a $90 billion valuation. Using social user and usage valuation comps, we could get much higher, but without disclosure these comp multiples are less relevant.

Upside case Alphabet math: Backing out our YouTube value, gross cash and other bets losses (and ignoring SBC), we estimate the 2017 Google P/E falls from 18.3x to 11.7x.

All in all, the end game here is that Merrill Lynch thinks that Google should trade at a premium to over the past five years, due to shareholder friendly actions and new product catalysts. And how a $90 billion valuation would stand out, Alphabet’s market capitalization rate is $508 billion.

Alphabet shares were last seen trading up 1.5% at $742.00 on Wednesday morning. The consensus analyst price target is $910.84, and the 52-week trading range is $539.21 to $810.35.

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