Google Parent Alphabet's Legal Woes May Create Buying Opportunity: Analyst
Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) is navigating a pivotal period marked by accelerating business fundamentals, robust advertising performance, and strong leadership in AI and cloud computing, even as a critical antitrust ruling looms.
The upcoming decision from Judge Amit Mehta in the U.S. Department of Justice’s search antitrust case, expected by August 8, 2025, could reshape the company’s operational landscape, though the long-term implications are viewed as manageable.
Despite the shadow of regulatory uncertainty, Alphabet’s core growth engines and aggressive AI initiatives signal sustained strength, as underscored by J.P. Morgan analyst Doug Anmuth.
Also Read: Google Cloud, YouTube, And Search Drive Big Upside: Goldman Sachs
On Monday, Anmuth reiterated an Overweight rating on Alphabet with a price forecast of $232, citing accelerating fundamentals, resilient advertising performance, and the company’s long-term leadership in both artificial intelligence and cloud computing.
Anmuth supported the rerating by the company’s accelerating fundamentals, resilient advertising performance, and long-term leadership in artificial intelligence and cloud computing.
While regulatory uncertainty continues to dominate investor sentiment, particularly surrounding the U.S. Department of Justice’s ongoing antitrust case over Alphabet’s search business, the analyst believes the risks are manageable and potentially over-discounted in the stock’s valuation.
He noted that investor attention is now centered on Judge Amit Mehta’s upcoming decision on remedies in the search antitrust case, which is expected no later than August 8, 2025.
While the exact nature of the remedy remains unclear, Anmuth believes the most likely outcome would involve a prohibition on exclusionary practices and exclusive preloading of Google Search across major access points such as Apple (NASDAQ:AAPL) devices, Android smartphones, third-party browsers, and Chrome in the United States.
More punitive measures, such as banning all distribution payments, forcing a Chrome divestiture, restricting AI programs, or enforcing extended remedy durations, are considered less probable but remain on the table, per the analyst.
Regardless of the outcome, Alphabet is expected to appeal both the August 2024 monopoly ruling and any associated remedies, potentially extending the regulatory process by 1.5 to 2.5 years based on historical precedent, such as the Microsoft (NASDAQ:MSFT) case, he noted.
From a financial perspective, Anmuth projects that Alphabet could face a 5% to 10% headwind to GAAP EPS in 2026 if stricter remedies are enforced.
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