Google Triumphs in Antitrust Battle, Shares Soar as Market Cap Surges $234B

Following a judicial ruling that allowed Google to avoid a proposed breakup, the tech giant’s stock surged by 9.14% this Wednesday, boosting its market capitalization by $234 billion. The outcome of the antitrust case was largely seen as favorable for Google among investors. In September 2023, the U.S. Department of Justice initiated a case with severe implications, including the potential divestiture of its Chrome browser.

In the previous year, a ruling had identified Google's dominance in the internet search market as illegal monopoly behavior. However, U.S. District Court Judge Amit Mehta dismissed the DOJ's request for a forced separation. This decision left Google with the capability to pay other companies for product pre-installations, though it cannot engage in exclusive agreements with payment or licensing conditions.

This allows Google to continue compensating Apple to maintain its status as the default search engine on iPhones, a move considered a triumph for Cupertino and a relief for Google, noting its enduring relationship with Apple. Google's primary search business remains competitive amidst challenges from firms such as Perplexity and OpenAI, maintaining a state of growth in its advertising sector.

In terms of Google's future in artificial intelligence, the company is focusing its hopes on its AI model suite and its chatbot, Gemini. Analyst Daniel Ives remarked in a report that, following the court’s decision, there's an increasingly constructive perspective on Google’s search business's longevity, leading to an updated price target of $245 for Alphabet’s stock.

The ruling not only protects Google from splitting its Android operating system, widely used by approximately 70% of the world’s smartphones, but also establishes it as a vital component for increasing Gemini’s user base. It provides Google with an established platform that is crucial for enhancing its AI reach.