Google Shares Surge 8% to Record High; Avoids Chrome & Android Breakup

Shares of Google parent Alphabet (GOOGL) surged as much as 8% in early trading today, hitting an all-time high of $229 and pushing its total market capitalization to $2.77 trillion, according to market data.

The rally comes on the heels of a U.S. court ruling that Google will not be required to divest its Chrome browser or spin off its Android operating system. These core businesses are central to Google’s dominance in the digital landscape, and the ruling is seen as a major win for the tech giant.

The court also ruled that Google is not barred from paying Apple (AAPL) to remain the default search engine on Apple devices. This allows Google to continue its long-standing practice of paying billions of dollars annually to secure its prime position in user search queries across the Apple ecosystem.

Furthermore, Google retains the freedom to compensate distribution partners for pre-installing Google Search, Chrome, or its generative AI products. This is critical for maintaining market share, especially as competition intensifies in the AI-powered search space.

The favorable legal outcome has prompted analysts to revise their outlook on Alphabet. JPMorgan Chase announced it has raised its price target for Alphabet from $232 to $260. Bank of America also upgraded its target price from $217 to $252.

The ruling also indirectly benefits Apple, which continues to receive multi-billion dollar payments from Google. Apple’s stock experienced a positive bump, rising over 2% in response to the news, highlighting the significance of this revenue stream.

Analysis: The court’s decision provides critical regulatory clarity for Google, removing a significant overhang that had weighed on investor sentiment. Maintaining control over Chrome and Android allows Google to continue its strategy of vertically integrating services, collecting valuable user data, and controlling key distribution channels. The continued ability to pay Apple for default search positioning ensures Google’s continued prominence in search, despite growing competition from AI-powered search alternatives. This favorable outcome reinforces Alphabet’s position as a tech behemoth and unlocks further potential for innovation and growth initiatives, particularly in generative AI. However, ongoing regulatory scrutiny remains a risk factor for Alphabet as antitrust concerns persist globally.