Shares of Alphabet Inc. (GOOG) and (GOOGL) surged approximately 8.4% on Wednesday morning ET after a U.S. federal judge ruled in favor of Google in a major antitrust case, allowing the company to retain its critical Chrome search business.
The U.S. Department of Justice filed a landmark lawsuit against Google in 2023, accusing the tech giant of monopolistic practices in the search engine market, particularly in digital advertising. On Tuesday, U.S. District Judge Amit Mehta officially ruled that Google does not have to divest its Chrome browser—a key driver of its search operations, accounting for over half of the company’s total revenue.
The judge also permitted Google to continue payments to major partners, such as Apple, to remain the default search engine on browsers like Safari. However, the ruling prohibits Google from entering into exclusive agreements that stifle fair competition and requires the company to share certain data to level the playing field for rivals.
Dan Ives, Global Head of Tech Research at Wedbush, described the decision as a monster win for both Apple and Google, noting that the ruling removes a huge overhang on the stock.
Despite the recent rally, Alphabet remains the lowest-valued stock among the “Magnificent Seven,” due partly to the DOJ lawsuit and concerns over the impact of AI chatbots on its search business. The company currently trades at a price-to-sales ratio of 6.9 and a forward P/E ratio of just 21, highlighting a significant valuation advantage.
As an established tech leader, Alphabet continues to generate substantial revenue from a diverse portfolio of high-growth businesses, including Waymo, YouTube, Google Cloud, and its in-house chip division. Moreover, Google Search—despite AI-related concerns—maintains its market dominance, as evidenced by its 12% year-over-year revenue growth in Q2.
