Key Takeaways
- Alphabet shares hit an all-time high Wednesday, a day after a federal court ruling that Google doesn’t have to divest its Chrome browser to address antitrust concerns.
- Judge Amit Mehta handed down the decision after ruling last year that Google held a monopoly in search.
- The decision also allows other companies, including Apple, to continue to receive payments to use Google search on their devices.
Alphabet (GOOGL) shares jumped over 9% to close at an all-time high of $230.66 Wednesday, a day after a judge ruled the tech giant doesn’t have to sell its Chrome browser following an antitrust lawsuit brought by the federal government.
Judge Amit Mehta said other companies, including Apple (AAPL), can also continue receiving payments for using Google search on their devices, although the decision prohibits Google from striking exclusive deals. Apple shares added nearly 4% Wednesday.
Mehta said worries consumers could be hurt by a forced sale of Chrome factored into the decision, along with the surge in popularity of artificial intelligence chatbots like ChatGPT that could become a competitive threat.
Last year, Judge Mehta determined that Google had broken antitrust laws through its domination of online search, but at the time didn’t decide on solutions. Mehta wrote in the decision that the Department of Justice had gone too far in calling for a divestiture of Chrome.
Analysts were positive about the news. JPMorgan said that for Alphabet, the decision would have “no major impact to financials going forward, which is a win,” and raised its price target to $260 from $232. Wedbush analysts said they “are increasingly constructive in the longer-term durability of Google’s Search business,” and also boosted their price target to $245 from $225.
With Wednesday’s gains, Alphabet shares are up about 22% year-to-date, while Apple shares are down roughly 5%.
This article has been updated since it was first published for added clarity, to include additional information, and reflect more recent share prices.