What Happened?
Shares of online advertising giant Alphabet (NASDAQ: GOOGL) jumped 8.3% in the morning session after a U.S. judge's ruling in a major antitrust case eased fears of a forced break-up of the company.
The decision allows Google to retain control of its key businesses, including the Chrome browser and Android mobile operating system, which the U.S. Department of Justice had sought to divest.
Investors welcomed the news, seeing it as a "massive win" that helps the tech giant avoid the worst-case scenario. While the company was spared a structural break-up, the judge did bar Google from entering into certain exclusive search agreements in the future and will require modest data sharing with competitors. The ruling removes a significant regulatory overhang for the company.
Following the news, analysts at Needham reiterated a 'Buy' rating and raised their price target from $220 to $260, signaling renewed confidence.
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What Is The Market Telling Us
Alphabet’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 22 hours ago when the stock dropped 2.1% on the news that the stock was caught in a broader tech-sector downturn fueled by renewed uncertainty over U.S. trade tariffs.
The sell-off in tech stocks followed an appeals court ruling that recently imposed U.S. "reciprocal" tariffs are illegal, sparking fresh concerns about trade policy. The news pressured many of the world's largest technology companies, with Nvidia, Amazon, Meta Platforms, and Microsoft also seeing declines in trading. Alphabet's drop also comes after a strong five-month winning streak that pushed the stock into what some analysts consider "overbought territory." The stock's daily Relative Strength Index (RSI), a momentum indicator, had approached 75, a level that can signal a potential pullback or correction is imminent.
Alphabet is up 20.9% since the beginning of the year, and at $228.95 per share, has set a new 52-week high. Investors who bought $1,000 worth of Alphabet’s shares 5 years ago would now be looking at an investment worth $2,810.
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