Alphabet Inc. (GOOGL) shares surge 1.49% after favorable court ruling, 10.8% rally in 3 days

Alphabet Inc. (GOOGL) shares surged to a new intraday high on Sept. 5, 2025, climbing 1.49% to mark a 10.8% rally over three trading sessions. The stock’s rebound followed a favorable U.S. District Court ruling that spared the company from forced divestitures of its Chrome browser and Android operating system, a decision that alleviated regulatory uncertainty and bolstered investor confidence.

The antitrust ruling, delivered on Sept. 4 by Judge Amit Mehta, rejected the Department of Justice’s (DOJ) proposal to break up Alphabet’s core products but imposed new constraints. These include restrictions on exclusive distribution contracts for Google Search, Chrome, and Gemini, as well as mandatory data sharing with competitors. While these measures limit Alphabet’s ability to maintain its dominance in digital services, analysts view the outcome as a net positive, as it avoids existential threats to its ecosystem. The ruling also preserves Alphabet’s lucrative partnership with Apple, which continues to use Google Search as Safari’s default engine, a deal valued at over $26 billion annually.

Alphabet’s AI-driven innovations are further fueling growth. Features like Circle to Search, AI Overviews, and AI Mode have expanded user engagement across 2 billion monthly active users, driving a 10% rise in global search queries. These advancements are directly linked to increased ad revenue, with Q2 2025 Search and other ad revenues climbing 11.7% year-over-year to $54.19 billion. YouTube ad revenue also surged 13.1% to $9.77 billion, reflecting the company’s ability to monetize AI-enhanced user experiences.

Financial performance in Q2 2025 reinforced the stock’s upward trajectory. Total revenue reached $96.43 billion, with net income jumping to $28.2 billion, translating to a 31% margin. Earnings per share (EPS) hit $2.31, surpassing estimates and marking nearly 10% year-over-year growth. The company’s aggressive share repurchase program—$59.5 billion over the past 12 months—has accelerated EPS growth by reducing the share count, while $95.15 billion in cash reserves and modest debt underscore financial stability.

Despite regulatory headwinds, including a €2.95 billion EU fine for adtech antitrust violations and privacy-related penalties, Alphabet’s ability to absorb costs without derailing growth remains a key strength. However, challenges in the cloud sector persist, as Google Cloud faces capacity constraints and competition from Amazon and Microsoft. The company plans $85 billion in 2025 capital expenditures to address these issues, though near-term revenue variability is expected until new infrastructure is operational.