TLDR
- Federal Judge Amit Mehta issued limited remedies in Google’s monopoly case, allowing the company to keep Chrome browser and continue paying Apple for default search placement
- Alphabet stock jumped 5.9% in premarket trading as investors were relieved the penalties were lighter than expected
- Google must stop entering exclusive distribution contracts and share certain search index data with competitors like Perplexity and OpenAI
- The judge noted that generative AI has changed the competitive landscape, with ChatGPT and other AI tools now posing real threats to Google’s search dominance
- Apple stock also rose 2.9% as it can continue receiving an estimated $20 billion annually from Google for default search placement
Alphabet shares surged in after-hours trading Tuesday as investors breathed a sigh of relief. Judge Amit Mehta’s long-awaited ruling in the U.S. vs Google monopoly case came in much lighter than Wall Street had feared.
The tech giant avoided the most damaging penalties that could have reshaped its entire business model. Google gets to keep its Chrome web browser, which serves as a crucial gateway to its search empire.
Perhaps more importantly, the company can continue its lucrative deal with Apple. This partnership brings Google billions in revenue each year by making it the default search engine on iPhones and other Apple devices.
The market reaction was swift and decisive. Alphabet stock rocketed 5.9% in premarket trading Wednesday. Apple shares also climbed 2.9% as investors recognized the continued flow of payments from Google.
Court Sets Some Boundaries
While Google escaped the harshest punishments, Judge Mehta did impose some meaningful restrictions. The company can no longer enter exclusive contracts that limit distribution of its core products.
This covers Google Search, Chrome, Google Assistant, and the Gemini AI app. The ruling opens up some breathing room for competitors who were previously shut out of key distribution channels.
Google also faces a new requirement to share certain search index data with rivals. This could prove valuable for AI-powered search companies like Perplexity and OpenAI that are trying to build better search tools.
The data-sharing mandate represents one of the more concrete ways competitors might gain ground. It gives them access to information that previously helped cement Google’s advantage in search results.
AI Changes Everything
Judge Mehta made it clear that artificial intelligence fundamentally altered his thinking about the case. In his 230-page ruling, he wrote that generative AI “changed the course of this case.”
When the original monopoly trial began, few viewed AI chatbots as serious threats to Google’s search business. That calculation has shifted dramatically over the past year.
Internet search traffic has been declining through much of 2025. Users are increasingly turning to AI tools like ChatGPT and Perplexity to get quick answers instead of traditional search engines.
Google has responded by integrating AI features into its own platform. The company added AI Overviews to search results and launched AI Mode for more conversational queries.
Financial Impact Looks Manageable
Analysts are already adjusting their outlook based on the ruling’s details. Cantor’s Deepak Mathivanan called the decision “as good as it likely gets” for Alphabet.
The analyst doesn’t expect Google to appeal the entire ruling. He maintained a neutral rating with a $201 price target on the stock.
Mathivanan noted that while Google will need to renegotiate some distribution agreements, the financial impact should be minimal. The company can still pay for placement deals, just without exclusive terms.
The ruling preserves Google’s ability to compete aggressively for market share. It just removes some of the contractual barriers that kept rivals locked out.
Apple also benefits from the decision since it can continue collecting payments from Google. These payments reportedly total around $20 billion annually for Apple.
Market Sees Path Forward
The stock market’s positive reaction reflects investor relief that Google’s core business model remains intact. Fears of a forced Chrome sale or an end to the Apple partnership have been put to rest, at least for now.
Alphabet currently holds a moderate buy rating from Wall Street analysts. Out of 35 analysts covering the stock, 26 rate it a buy while nine recommend holding.
The average price target sits at $216.87, suggesting modest upside from current levels. These targets may shift as analysts digest the full implications of Tuesday’s ruling.
Judge Mehta left room to revisit certain aspects of the case later. This means ongoing oversight will continue, but the immediate threat of business-breaking penalties has passed.
Google acknowledged the ruling in a statement emphasizing how AI has changed the competitive landscape. The company highlighted that people now have many more ways to find information online.
The court’s recognition of AI’s disruptive potential may influence how regulators approach big tech cases going forward. Traditional antitrust thinking is being challenged by rapidly evolving technology markets.
