Shares of Big Tech giant Alphabet (GOOGL) have reached new all-time highs, lifted by a favorable—if not overly lenient—outcome in the U.S. antitrust case over Chrome and Android. The ruling eased concerns about potential damage to Google’s core Search business, already under pressure from rising AI-driven competition. This past week, the stock has demonstrated its market resilience by adding 12% and is now testing top levels around $230 per share for further upside.
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Although Alphabet emerged from the lawsuit with some limitations, they should not be materially serious. However, the recent double-digit rally in just one week was driven more by a multiple correction than by any meaningful development that adds to the Search business growth story. Historically, GOOGL tends to outperform even when richly valued, so I don’t see this as a time to take any stance other than Bullish on Alphabet shares.
Antitrust Victory Boosts Confidence in Alphabet’s Search
It’s a fact that markets are averse to uncertainty. This is because, in most cases, these situations are the hardest to price accurately. When an event has an unknown outcome—often involving legal proceedings or regulatory decisions—investors tend to assume the worst-case scenario.
That’s precisely the situation Alphabet faced over the past year. The company risked having to sell Chrome and implement contingencies for Android, as it was accused of maintaining an illegal monopoly in these markets. But in the first week of September, the U.S. court ruled that Alphabet would not have to divest or restrict Chrome and Android, noting that Google had not used them to illegally limit competition.
This was a significant relief. With Chrome accounting for 54% of U.S. web browser users and Android responsible for 74% of the mobile operating system market, selling these valuable assets would have been a massive hit. Keep in mind that the Search and Others segment contributes around 65% of Alphabet’s total revenue, according to the latest quarterly figures.
Since the start of last year—and especially in 2025—the market has been somewhat skeptical about Alphabet’s Search business, mainly due to the impact of AI on search and advertising dynamics. Even so, the financial results showed resilience. Over the last two years, the Search and Others segment consistently posted low double-digit growth, except for Q3 2024, which saw 9% year-on-year growth.
In any case, the reduced perception of risk for Alphabet’s Search business after this antitrust victory helped GOOGL shares reach all-time highs around $230, with the market finally appreciating the growth story of Search more fully.
The Caveat for Alphabet’s Antitrust Win
The big caveat to this “win” for Alphabet in the antitrust case is that the company did not emerge completely unscathed. The court imposed limits on the distribution of Google’s services, requiring it to share search data with rivals, thereby reducing the exclusivity of data that had previously been theirs alone.
This raises concerns about user privacy and could potentially give competitors like Apple’s (AAPL) Safari an advantage, which holds about 15% of the global browser market and is known for its strong privacy measures, including blocking trackers and limiting data sharing. More importantly, however, the recent court ruling did not affect Alphabet’s $20 billion contract with Apple, which keeps Google as the default search engine on iPhones, iPads, and Macs.
Perhaps the main impact will be on data-driven search competitors, who can now compete more effectively with Google—particularly by integrating AI or offering more personalized search results. By accessing aggregated search data, rivals can train more effective AI models, deliver more personalized results to users, and potentially enhance targeted advertising and revenue.
In the short term, the effect will be limited. But over the medium to long term, we can expect increased competition in AI-powered search products—such as OpenAI’s and Perplexity’s offerings—which will require Alphabet to continuously innovate and improve its Search products to maintain its market share.
Why Higher Multiples Haven’t Slowed GOOGL Stock
Although Alphabet is trading at all-time highs, its business model boasts wide moats across Search, YouTube, Cloud, Network, and “Other Bets.” Compared to other large tech peers, its valuation multiples remain modest, which is understandable given its ad-based revenue model, still somewhat sensitive to economic cycles.
Alphabet’s forward earnings multiple of 23.2x is the lowest among its Magnificent 7 peers, while its forward EV/sales multiple of 7x is second only to Amazon (AMZN) in the peer group (3.7x), even though Alphabet has a distinct core business model. Considering its growth potential, analysts currently expect a 15% long-term EPS CAGR (three to five years), implying a PEG of 1.5, which only falls short of Nvidia’s (NVDA) PEG of 1, which, quite frankly, is pretty hard to match given its unparalleled growth prospects in the AI era.
Looking at Alphabet’s own history, the current 22.5x earnings multiple remains below the five-year average of 25x. Over the last two years, GOOGL’s share price has tended to rise when its multiple exceeded 23x, suggesting that, contrary to intuition, higher valuations have not slowed the stock’s performance. Instead, they have coincided with periods of broader market optimism, which seems to be the case today.
Is GOOGL a Buy, Hold, or Sell?
There’s widespread optimism on Wall Street about GOOGL. Of the 36 analysts covering the stock over the past three months, 27 have assigned a Buy rating, while the remaining nine recommend Hold. Despite recent increases in price targets, GOOGL’s average stock price target of $230.06 implies ~1% downside from the current share price.
GOOGL Upside Persists Despite Stretched Multiples
Alphabet shares recently reached all-time highs, driven more by a less pessimistic view of its Search business than by any specific development materially boosting its growth story. At current multiples, however, there is still room for optimism.
Over the past couple of years, Alphabet shares have tended to perform well during periods of stretched multiples, which coincided with stronger growth narratives—suggesting that the market has shown greater tolerance, and even a premium, for higher valuations. For these reasons, I currently see Alphabet as a Buy.