Alphabet (NASDAQ:GOOGL) stock jumped nearly 6% in premarket trading Wednesday following a federal judge’s ruling that Google will not be required to divest its popular Chrome web browser as part of remedies in the Justice Department’s landmark antitrust case.
Judge Amit Mehta’s decision allows Google to avoid one of the most severe potential penalties after the court previously found the company had maintained an illegal monopoly in the search market. While Google is barred from entering exclusive search contracts, the ruling spares the company from divesting key assets.
The judgment also confirmed that Google will not have to sell its Android operating system, marking another major victory for the tech giant. In addition, the judge ruled that Google can continue payments to Apple and other companies for preloading Google products.
Although the ruling will last six years, it does require Google to share certain information with competitors as a remedy for its online search monopoly. This outcome, less severe than what prosecutors sought, appeared to reassure investors.
Google commented in a blog post, noting it has “concerns about how these requirements will impact our users and their privacy,” and that it was “reviewing the decision closely.” The company added, “The Court did recognize that divesting Chrome and Android would have gone beyond the case’s focus on search distribution, and would have harmed consumers and our partners.”
BMO analysts noted that while the ruling was a net positive for Google, they remained cautious as a decision on Google’s advertising dominance is still pending. “We believe the potential remedies stemming from the Ad Tech case have the likelihood of being much harsher, as the DOJ seeks a divestiture of Google Ad Manager,” they said, while reiterating their Outperform rating on the stock.
Apple (NASDAQ:AAPL) also benefited, with shares rising 3.6%, as the ruling allows continuation of the lucrative deal in which Google pays Apple to be the default search engine on iOS devices. Wedbush called the outcome a “big win” for Apple, adding it could pave the way for a broader AI collaboration between Apple and Google’s Gemini.
KeyBanc Capital Markets analysts described the ruling as “better than feared,” suggesting it acts as a clearing event for Alphabet shares to trade at least in line with the S&P 500. They added that with “improved competitive prospects in AI and Google Cloud’s rapid growth,” investors are likely to refocus on underlying asset value and consider “whether the discount on Google Services makes sense.” “With our math suggesting these assets are trading at a ~15x 2027E P/E (based on after-hours prices), we see further room for share price appreciation ahead,” the team said.
Citizens analysts also noted that despite the recent valuation reset, they “want investors to chase here,” arguing that greater certainty and leadership in AI should help lift Google’s valuation multiples as it becomes “increasingly an AI winner” with a key overhang now removed.
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