Google just scored a massive legal victory that sent Wall Street into celebration mode. U.S. District Judge Amit Mehta ruled against the Justice Department's most aggressive proposals in the landmark antitrust case, allowing Google to keep Chrome and continue paying Apple billions for default search placement. Alphabet stock rocketed 8% as investors exhaled relief over what could have been a company-defining breakup.
Google just survived what could have been Silicon Valley's biggest breakup since Ma Bell. Judge Amit Mehta's ruling Wednesday morning sent Alphabet shares soaring 8% as investors realized the search giant dodged the Justice Department's nuclear option – forcing it to sell Chrome and potentially Android too.
The market reaction was swift and decisive. Within hours of the ruling, analysts were upgrading price targets and declaring victory for Big Tech's most scrutinized company. "This is a monster win for Cupertino and for Google its a home run ruling that removes a huge overhang on the stock," Daniel Ives from Wedbush Securities told CNBC, immediately raising his price target to $245.
The stakes couldn't have been higher. When the DOJ filed its breakup proposal in September 2023, it targeted Google's most valuable assets – the Chrome browser that commands 65% market share and the Android operating system running 70% of global smartphones. The original antitrust case found Google held an illegal monopoly in internet search, setting up this high-stakes remedy phase.
Mehta's decision preserves Google's most lucrative partnership. The company can continue paying Apple an estimated $20 billion annually to remain the default search engine on iPhones – a deal that drives massive traffic and ad revenue. Apple shares rose alongside Alphabet as investors recognized the mutual benefit would continue, albeit with some guardrails on exclusive arrangements.
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The ruling comes at a critical moment for Google's AI ambitions. The company faces unprecedented competition from OpenAI's ChatGPT search features and rising startup Perplexity, both threatening Google's search dominance with conversational AI interfaces. Keeping Android becomes crucial as Google pushes its Gemini AI models to the 3 billion Android users worldwide.
"Android is seen as a key tool for Google to increase the number of users for Gemini," the ruling noted, highlighting how the operating system serves as Google's AI distribution platform. With 70% of smartphones globally running Android, Google maintains a vast installed base for competing against OpenAI's growing consumer adoption.
