What Google's Antitrust Ruling Means for Alphabet Stock
A federal judge ruled that Alphabet-owned Google holds a monopoly in search and text advertising, but Wall Street isn't worried. Here's what they have to say.
Alphabet (GOOGL) stock is struggling for direction Tuesday after a U.S. federal judge ruled Monday that Google has unlawfully maintained a monopoly in search and text advertising. Shares of Alphabet, which owns the search engine, were last seen marginally higher after sinking more than 4% in Monday's market meltdown.
"After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly," wrote Judge Amit Mehta of the U.S. District Court for the District of Columbia in his ruling.
The suit was originally filed in 2020 and the ruling is the first anti-monopoly decision against a technology company in decades, according to CNBC. The ruling focused on Google's exclusive search arrangements with Android and Apple smart devices, which "helped to cement Google's anticompetitive behavior and dominance over the search markets," it added.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"This victory against Google is an historic win for the American people," said U.S. Attorney General Merrick Garland in a statement. "No company – no matter how large or influential – is above the law. The Justice Department will continue to vigorously enforce our antitrust laws."
Alphabet does not agree with the court's decision.
"This decision recognizes that Google offers the best search engine, but concludes that we shouldn't be allowed to make it easily available," said Alphabet President of Global Affairs Kent Walker in a statement, adding that the company will appeal the decision.
What should Alphabet investors make of the Google ruling?
Alphabet has kept up the pace on the price charts relative to its fellow Magnificent 7 stocks. For the year to date, GOOGL stock is up more than 14%. And Wall Street thinks the communication services stock has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for GOOGL stock is $205, representing implied upside of nearly 30% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Needham is one of the more bullish outfits on GOOGL stock with a Buy rating and $210 price target.
"GOOGL is our top large-cap stock pick for 2024, owing to a stronger macro backdrop, record political ad spending, data advantages, and Generative AI integrations (which lowers operational expenditures and drive revenue upside)," says Needham analyst Laura Martin.
As for the antitrust ruling against Google, Martin says that "investors anticipated this outcome" and anticipates a "minimal near-term impact" on the stock. "We believe consumers give Google Search its monopoly, so even without its exclusive contracts, consumers will download the Google app and its Search market share won't change materially," she adds.
Related Content
-
The Top 10 Side Gigs For Retirees In 2026Money is freedom in retirement; here’s how to earn more of it with a profitable side gig
-
3 Retirement Changes to Watch in 2026: Tax EditionRetirement Taxes Between the Social Security "senior bonus" phaseout and changes to Roth tax rules, your 2026 retirement plan may need an update. Here's what to know.
-
The 'Yes, And...' Rule for RetirementRetirement rarely follows the script. That’s why the best retirees learn to improvise.
-
What Not to Do After Inheriting Wealth: 4 Mistakes That Could Cost You EverythingGen X and Millennials are expected to receive trillions of dollars in inheritance. Unless it's managed properly, the money could slip through their fingers.
-
'The Money Prism' Solves Retirement Money's Biggest Headache: Here's HowThis simple, three-zone system (Blue for bills, Green for paycheck, Red for growth) helps you organize your retirement savings by purpose and time.
-
No, AI Can't Plan Your Retirement: This (Human) Investment Adviser Explains WhyAI has infinite uses. But creating an accurate retirement strategy based on your unique goals is one place where its possibilities seem lacking.
-
A Value Focus Clips Returns for This Mairs & Power Growth FundRough years for UnitedHealth and Fiserv have weighed on returns for one of our favorite mutual funds.
-
Small-Cap Stocks Gain Momentum. That's Good News for This iShares ETFThe clouds appear to be parting for small-cap stocks, which bodes well for one of our favorite exchange-traded funds.
-
Don't Let a 60/40 Portfolio Derail Your Retirement: Why a Cookie-Cutter Approach Could Cost YouChoosing a personalized retirement investment plan, rather than relying on the 60/40 portfolio, could help protect your savings and ensure long-term growth.
-
Are You Winging Your Retirement Plan? A Wealth Adviser's Tips to Help Build Wealth and Navigate RiskIf you have no strategy tying together your accounts or haven't modeled scenarios to make sure your savings will last, then your plan is probably inefficient.
-
Divide and Conquer: Your Annual Financial Plan Made Easy, Courtesy of a Financial AdviserOverwhelmed by your financial to-do list? Split it into four quarters and assign each one goals that connect to the time of year. It could be life-changing.
