As Alphabet shares fell after the Google-parent missed Wall Street's third-quarter earnings expectations, one analyst proposed a solution: Divest YouTube, one of the tech giant's most valuable assets.

"We think GOOGL should spin off part or all of YouTube, which we estimate would be worth $300B on a stand-alone basis," Needham analyst Laura Martin wrote in a note to investors on Tuesday.

With Alphabet under rising political and regulatory pressure in the U.S., the so-called "techlash," Martin sees several ways spinning off YouTube would create value for the company. The Needham analyst sees YouTube getting a high value as a pure-play streaming company, while also having better employee retention and more direct accountability from YouTube's leadership.

If YouTube becomes a $300 billion standalone company, it would rank as one of the 15 biggest companies in the S&P 500 – with a market value greater than Exxon Mobil or Bank of America. Specifically, it would rank as the 13th biggest company just behind Procter & Gamble's $307 billion market value.

Alphabet's total market cap is nearly $900 billion, third behind Apple and Microsoft.

"YouTube would trade at $300B as a separate public company because streaming and growth investors will NOT buy the GOOGL conglomerate, but would pay 10x EV/Revs for an independent YouTube (Roku's multiple), we believe," Martin said.

Alphabet reported third-quarter earnings after markets closed on Monday of $10.12 a share, below the $12.42 a share expected according to analysts surveyed by Refinitiv.

– CNBC's Michael Bloom contributed to this report.