‘Black Swan Event’ Could Trigger 25% Drop in Alphabet Stock, Warns Barclays

Alphabet (GOOGL) investors may be in for a shock. According to Barclays, a potential court-ordered breakup of Google’s Chrome browser could lead to a sharp selloff in the tech giant’s stock. In what the firm dubs a possible “black swan event,” GOOGL stock could plunge as much as 25% if U.S. District Judge Amit Mehta rules that Google must divest Chrome as part of the ongoing antitrust case. While still a hypothetical scenario, the warning highlights the serious risks looming over one of Alphabet’s most widely used products.

During the last closing arguments, the Department of Justice pushed for a divestiture of Google Chrome and called for equal access to search data for rival firms. This is aimed at curbing Google’s dominance in the search market and fostering a more competitive digital landscape. Notably, Judge Mehta is expected to rule on a remedy, and the fate of Google’s search empire, in August. Google, meanwhile, has stated it will appeal the case.

Barclays Stays Bullish on GOOGL Stock

According to five-star-rated analyst Ross Sandler at Barclays, a forced sale of Chrome could cause Alphabet’s stock to fall by up to 25% and potentially reduce its earnings per share by around 30%.

Nonetheless, Sandler reiterated his Buy rating on GOOGL stock, predicting a 30% upside from current levels.

Sandler noted in a Monday report that although the chances of Google being forced to sell its Chrome browser remain low, they have grown following the recent closing arguments in the case. He suggested that if a divestiture occurs, the most likely buyers would be financially strong AI companies such as OpenAI, Anthropic, or possibly Perplexity. Sandler emphasized that losing Chrome would be a significant setback for Google, considering the browser’s massive user base of 4 billion people and its contribution of 35% to Google’s search-related revenue.

Is Google a Good Stock to Buy?

Overall, Wall Street analysts have a Strong Buy consensus rating on GOOGL stock based on 38 Buys and nine Holds assigned in the past three months. The average GOOGL stock price target of $199.14 per share implies an 18% upside potential.

See more GOOGL analyst ratings