Alphabet stock hits new high after judge rules Google can keep Chrome browser

Investing.com -- Alphabet (NASDAQ:GOOGL) stock jumped to a new all-time intraday high on Wednesday after a federal judge ruled that Google will not be required to sell its popular Chrome web browser as part of remedies in the Justice Department’s landmark antitrust case.

The shares rose to $230.86 per share in early trading. As of 10:18 ET, the stock is up 7.9% at $228.14. 

Judge Amit Mehta’s decision allows Google to avoid one of the most severe potential penalties following the court’s earlier finding that the company maintained an illegal monopoly in the search market. While Google will be barred from entering into exclusive contracts for internet search, the ruling spares the tech giant from divesting key assets.

The decision also determined that Google will not have to sell off its Android operating system, representing another significant victory for the company. Additionally, the judge ruled that Google will not be required to cease payments to Apple and other companies for preloading Google products.

The judgment, which will last for six years, does require Google to share certain information with competitors as a remedy for its online search monopoly. This less severe outcome than what government prosecutors had sought appears to have relieved investors.

Google said in a blog post that it has "concerns about how these requirements will impact our users and their privacy," and that it was "reviewing the decision closely." 

"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 said while the ruling was a net positive for Google, they remained cautious, given that a decision on Google’s advertising dominance was still due. 

"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," BMO analysts said. Still, they reiterated their Outperform rating on the stock. 

Tuesday’s ruling also positively affected Apple (NASDAQ:AAPL), whose shares rose 3.6%, as the ruling allows the continuation of a lucrative arrangement where Google pays Apple to be the default search engine on iOS devices.

Wedbush called the ruling a "big win" for Apple, adding that the ruling could also open the door for a more comprehensive artificial intelligence deal between Apple and Google’s Gemini. 

Separately, KeyBanc Capital Markets analysts said the ruling "came in better than feared, and we believe this acts as a clearing event for Alphabet shares to trade at least in line with the S&P 500."

The analysts said that with “improved competitive prospects in AI and Google Cloud’s rapid growth,” they expect investors will refocus on the underlying asset value and question “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 added.

Separately, Citizens analysts said that despite the recent valuation reset, they “want investors to chase here,” arguing that greater certainty and AI leadership should help Google’s valuation multiples move higher as it becomes “increasingly an AI winner” with a key overhang now removed.

(Ambar Warrick, Louis Juricic, Sam Boughedda contributed to this report)