Shares of Google’s parent company, Alphabet, surged the most in nearly five months to an intraday high as trading opened Wednesday, after a federal judge ruled the company does not need to be broken up or be forced to sell its popular Chrome web browser to remedy its search market monopoly.
Google said the court’s “decision recognizes how much the industry has changed through the advent of AI.”
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Key Takeaways
- Alphabet’s shares rallied more than 8% to just above $229 around 10 a.m. EDT Wednesday, pacing the largest single-day increase for the stock since April.
- Alphabet headlined an uptick for the S&P 500 and Nasdaq, which rose by 0.2% and 0.7%, respectively, while the Dow Jones Industrial Average fell slightly (0.2%).
- The positive market reaction comes after Google avoided the harshest potential penalties in the federal antitrust case and was only ordered to share its search and user-interaction data with “Qualified Competitors.”
- Apple’s shares similarly jumped more than 2% to around $235 after federal judge Amit P. Mehta’s ruling allowed Google to keep paying the iPhone-maker around $20 billion to remain the default search engine on Apple devices.
- Mehta, however, banned Google from entering into exclusive contracts “relating to the distribution of Google Search, Chrome, Google Assistant and the Gemini app.”
Crucial Quote
WedBush Securities analyst Dan Ives wrote in a note Tuesday about Mehta’s ruling: “This is a monster win for Cupertino and for Google, it’s a home run ruling that removes a huge overhang in the stock,” adding analysts at the firm are “increasingly constructive in the longer-term durability of Google’s Search business.”
What Has Google Said?
In a statement issued shortly after the ruling, Google said the decision “recognizes how much the industry has changed through the advent of AI, which is giving people so many more ways to find information.
This underlines what we’ve been saying since this case was filed in 2020: Competition is intense and people can easily choose the services they want.” The company, however, expressed concerns about the judge’s decision to impose “limits on how we distribute Google services” and “share Search data with rivals,” saying: “We have concerns about how these requirements will impact our users and their privacy, and we’re reviewing the decision closely.”
Chief Critic
Epic CEO Tim Sweeney, who has been involved with antitrust fights with Google, criticized the ruling on X, saying: “It’s like a defendant robbed a series of banks and the court verdict found them guilty, then sentenced them to probation under which they may continue robbing banks but must share data on how they rob banks with competing bank robbers.”
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