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Published : 04 Sep 2025, 08:43 AM
Alphabet shares closed more than 9% higher on Wednesday after a US judge ruled against breaking up the Google parent, clearing a major regulatory overhang and adding about $210 billion to the company's market value.
The ruling on Tuesday by Judge Amit Mehta allows Google to retain control of its Chrome browser and Android mobile operating system, while barring certain exclusive contracts with device makers and browser developers.
Google was also allowed to keep making payments to partners such as Apple to feature its search engine. Shares of the iPhone maker closed up 3.8%.
"This outcome removes a significant legal overhang and signals that the court is willing to pursue pragmatic remedies rather than scorched-earth tactics," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
Alphabet shares, which hit a record intraday high of $231.31, are up nearly 22% this year, outperforming the S&P 500 index, but trailing Big Tech peer Meta.
The ruling preserves Alphabet's ability to deepen its partnership with Apple and potentially integrate its Gemini AI into future iPhones, analysts said.
"The payments from Google were a huge revenue generator for the tech giant and the fact these can continue will be a relief in what has been a turbulent year," said Ben Barringer, head of technology research at Quilter Cheviot, an investor in Apple and Alphabet.
Apple was in early talks to use Gemini AI to underpin a revamped Siri voice assistant on its devices, Bloomberg News reported last month.
The US government sued Google in 2020, alleging it illegally maintained a monopoly in search through exclusionary deals with device makers and browser developers.
Alphabet's shares trade at 20.3 times earnings expectations, a discount to other so-called Magnificent Seven stocks and the broader S&P 500 index.
Alphabet's forward price-to-earnings multiple lags Magnificent 7 peers
Alphabet's forward price-to-earnings multiple lags Magnificent 7 peers
CHALLENGE TO SEARCH DOMINANCE
The Justice Department said the remedies will pry open the market for search services and protect GenAI competition.
Nvidia boss Jensen Huang says he’s talking to the White House about what chips his firm can sell to China.
Judge Mehta ruled last year that Google violated antitrust laws but declined to order a breakup on Tuesday, citing the rise of AI tools like ChatGPT as emerging competition.
Google must share certain search index and interaction data with competitors, the ruling said, a move that can help AI rivals build and improve competing chatbots and search tools.
Even so, Google's scale and data lead remain formidable, analysts said.
"The order requires data sharing that is limited in scope, in a way we conclude may only marginally boost competition by generative AI services," said Nick Rodelli, legal analyst at CFRA Research's Washington Analysis.
