Alphabet (GOOG) shares surged more than 8% on Wednesday after a federal judge handed Google a major win in a long-running antitrust battle.
The decision spares the company from having to sell its Chrome browser or Android operating system, a relief for investors who had braced for a far harsher outcome.
Court Blocks Harshest Remedies but Imposes New Limits
Judge Amit Mehta of the District of Columbia ruled that a forced breakup of Google’s core businesses would be a “poor fit,” rejecting the Justice Department’s request to unwind Chrome or Android. He also declined to block the company’s multibillion-dollar revenue-sharing agreements, such as the roughly $20 billion in annual payments Google makes to Apple (AAPL) to keep its search engine the default option on iPhones and Siri.
Judge Amit Mehta of the District of Columbia ruled that a forced breakup of Google’s core businesses would be a “poor fit,” rejecting the Justice Department’s request to unwind Chrome or Android. He also declined to block the company’s multibillion-dollar revenue-sharing agreements, such as the roughly $20 billion in annual payments Google makes to Apple (AAPL) to keep its search engine the default option on iPhones and Siri.
Still, Google faces restrictions. It can no longer sign exclusive distribution deals tying together its search engine, browser, or Gemini AI services, and must share some search index data with competitors. The court noted that rising competition from generative AI justified lighter remedies, arguing that market forces should help balance search dominance going forward.
Investors Cheer, Analysts Turn Bullish
The ruling lifted a cloud of uncertainty that had hung over Alphabet for years. With the breakup threat removed, Wall Street analysts quickly revised their outlooks. Wedbush raised its price target to $245, calling the decision “broadly favorable for Google,” while Oppenheimer and RBC also boosted targets, pointing to a clearer growth runway.
For Apple, the ruling also came as a win. Its shares climbed nearly 3% as its lucrative search deal with Google remains intact, representing as much as 15% of Apple’s operating income by some estimates.
The ruling lifted a cloud of uncertainty that had hung over Alphabet for years. With the breakup threat removed, Wall Street analysts quickly revised their outlooks. Wedbush raised its price target to $245, calling the decision “broadly favorable for Google,” while Oppenheimer and RBC also boosted targets, pointing to a clearer growth runway.
For Apple, the ruling also came as a win. Its shares climbed nearly 3% as its lucrative search deal with Google remains intact, representing as much as 15% of Apple’s operating income by some estimates.
Financial Strength and AI Growth Bolster the Case
Beyond the courtroom victory, Alphabet’s recent financials underscore why investors see staying power. In the second quarter of 2025, the company reported $96.4 billion in revenue, up 14% year over year, and $28.2 billion in net income, up 19%. Search remains a profit engine, generating nearly $200 billion in advertising revenue last year, while YouTube Shorts and subscriptions continue to expand.
AI adoption is accelerating. Features like AI Mode and AI Overviews already reach billions of users globally, while the Gemini app boasts 450 million monthly active users. Google Cloud, meanwhile, now commands 13% of the global infrastructure market and is on a $50 billion annual run rate, supported by a $106 billion backlog.
Alphabet trades at about 21 times forward earnings, below the broader S&P 500’s valuation, giving investors exposure to one of the strongest AI and cloud growth stories in tech at a relative discount.
Beyond the courtroom victory, Alphabet’s recent financials underscore why investors see staying power. In the second quarter of 2025, the company reported $96.4 billion in revenue, up 14% year over year, and $28.2 billion in net income, up 19%. Search remains a profit engine, generating nearly $200 billion in advertising revenue last year, while YouTube Shorts and subscriptions continue to expand.
AI adoption is accelerating. Features like AI Mode and AI Overviews already reach billions of users globally, while the Gemini app boasts 450 million monthly active users. Google Cloud, meanwhile, now commands 13% of the global infrastructure market and is on a $50 billion annual run rate, supported by a $106 billion backlog.
Alphabet trades at about 21 times forward earnings, below the broader S&P 500’s valuation, giving investors exposure to one of the strongest AI and cloud growth stories in tech at a relative discount.
Conclusion
The antitrust ruling removes a major overhang for Google, preserving its most profitable partnerships and product lines. With its search dominance intact, cloud business scaling, and AI products gaining momentum, Alphabet’s rebound reflects renewed confidence from both Wall Street and billionaire investors. For long-term investors, the case outcome not only eliminated a breakup risk but also reaffirmed Alphabet’s role as one of the most resilient players in the digital economy.
The antitrust ruling removes a major overhang for Google, preserving its most profitable partnerships and product lines. With its search dominance intact, cloud business scaling, and AI products gaining momentum, Alphabet’s rebound reflects renewed confidence from both Wall Street and billionaire investors. For long-term investors, the case outcome not only eliminated a breakup risk but also reaffirmed Alphabet’s role as one of the most resilient players in the digital economy.
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