Alphabet’s antitrust showdown has ended with a ruling that reshapes the trajectory of the company’s core search and advertising business.
Alphabet was sued by the U.S. Department of Justice (DOJ) in 2020, accused of maintaining an illegal monopoly in online search and advertising through exclusionary deals with companies like Apple.
But on Tuesday, a judge in Washington stopped short of breaking up Google, preserving its lucrative deal with Apple while ordering it to share data with rivals, reports Reuters.
The decision sent Alphabet shares sharply higher, marking the company’s biggest single-day move since April. Dan Ives, global head of technology research at Wedbush, says the outcome is a turning point for Google and Apple alike, noting artificial intelligence has now cemented its regulatory status as a massive growth catalyst.
“Look, the belt waver is big tech. It’s going to continue to be a battle. It doesn’t end here. But for Google, it’s a champagne moment because now they’re going to be unleashed, especially when it comes to AI that goes from a headwind now to a tailwind.”
Ives also unveils his firm’s price targets for GOOGL.
“Yeah, I mean, look, we raised price target $245, but ultimately, and me and my colleague Scott Debitt have talked about it, I mean, this could be a $300 stock. Because now, you’re going to start to see the multiple expand. You take now the DOJ overhang, the antitrust. I now think Apple and Google potentially could start to walk down the aisle in terms of a bigger Gemini partnership from an AI perspective.”
As of Wednesday’s close, GOOGL is trading at $230.66.
Last month, Bloomberg reported that Apple is weighing whether to let Google power the brain of Siri, a move that would mark a stunning break from its long-held strategy of building artificial intelligence (AI) in-house. The deal would give Siri a new backbone after years of delays and false starts, while thrusting Apple into an uneasy alliance with its fiercest rival.
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