Alphabet shares jumped 6% in premarket trading Wednesday after a U.S. court rejected the Department of Justice’s (DOJ) bid to break up Google in an antitrust case, prompting Bank of America to raise price targets for both Alphabet and Apple.
The DOJ had pushed for drastic measures, including forcing Google to divest its Chrome browser, after it was found to hold an illegal monopoly in internet search. However, U.S. District Judge Amit Mehta declined to impose the harshest penalties, allowing Google to keep Chrome and its Android operating system.
Under the ruling, Google can still pay companies to preload its products, such as being the default search engine on Apple’s iPhones, though exclusive contracts that condition payments or licensing will no longer be allowed.
Apple shares also gained in premarket trading following the decision.
“This is a monster win for Cupertino and for Google it’s a home run ruling that removes a huge overhang on the stock,” said Daniel Ives, global head of technology research at Wedbush Securities.
Bank of America mirrored that sentiment, lifting its price target for Alphabet from $206 to $235 and for Apple from $230 to $250, citing improved regulatory clarity and strong growth prospects.
Despite rising competition from AI-driven search rivals like Perplexity and OpenAI, Google’s advertising business remains solid. The company is also betting big on Gemini, its suite of AI models and chatbot, to power future growth.
With Android running on about 70% of smartphones worldwide, analysts see it as a critical channel to scale Gemini and other AI products, cementing Google’s competitive edge.
Leave a Reply