Quick overview

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Experts from Barclays Bank warned Alphabet’s stock could decline by 15% to 25% if U.S. District Judge Amit Mehta orders Google to divest its Chrome browser.

Google lost a landmark antitrust trial against the United States Department of Justice (DoJ) in August 2024, . Judge Mehta ruled that the tech giant had a monopoly in the search engine industry, specifically within the “general search” and “general search text” advertising markets, which are displayed sequentially in three sections on the results page.

Last week marked the conclusion of the closing arguments phase in the case involving Google and the DoJ. During these arguments, the Department of Justice asserted that Judge Mehta should require Google to sell the Chrome web browser and provide equal access to its search data for other competitors.

Barclays analyst Ross Sandler wrote in a Monday note that “the probability of a Chrome divestiture, while low, has increased in our view.” He also noted that “the most likely candidates” to buy Chrome would be ‘lower AI companies like OpenAI, Anthropic, or Perplexity.’ “

Sandler noted that it could be “a considerable setback” to Google, considering that Chrome has 4 billion users and constitutes 35% of Google search revenue.” Annual revenue for Google is around $283 billion

As Sandler predicted, “This would be a major development, a black swan event for GOOGL stocks. Shares would trade off significantly unless this remedy plays out.”

Sandler foresees a 25% % stock drop with a divestiture of Chrome and a further 30% % available “earnings per share-related hit to Alphabet’s shares.”

“We remain uncertain about what remedies the court will come up with. “As we told you, we listened to the entire day of closing arguments, and certainly at some moments, we felt a lot worse than we did prior, and at other times, we felt better in the sense of the GOOGL stock price impact,” Sandler mentioned.