As Alphabet Inc.
While JPMorgan analyst Doug Anmuth sees potential headline risk, he believes this could also bring clarity, setting the stage for Google's response and future appeal strategies.
"The DOJ's final proposal should represent the worst possible remedies," Anmuth notes, adding that Google's counterproposal on Dec. 20 will likely paint a much less drastic picture. Despite these looming legal battles, Anmuth maintains an Overweight rating on GOOGL stock, citing a price target of $212 - 20% above its current levels.
Remedies, Risks, And The Trump Factor
The DOJ's remedies are expected to focus on limiting Google's exclusive search agreements, restructuring its Android and Chrome platforms and curbing its AI-driven monetization practices. "A separation proposal could be severe," warns Anmuth, "and remedies may extend beyond search to include limitations on AI advancements."
Adding to the uncertainty, the coming Donald Trump administration could bring renewed scrutiny. Trump has oscillated between calling for Google's "prosecution at maximum levels" and emphasizing its strategic importance in competing with China.
Such a backdrop could influence not just the final remedies but also the broader tech landscape.
Investors Eye The Bigger Picture
Despite the regulatory fog, Alphabet's fundamentals remain robust. Recent third-quarter earnings showcased a 35% year-over-year surge in Google Cloud revenue, operating profit margins exceeding expectations, and steady progress in AI search initiatives. "Google shares are just 9% below all-time highs," Anmuth highlights, "and the GAAP P/E multiple discount to Meta has narrowed significantly."
The road ahead includes pivotal milestones, such as the judge's anticipated remedies decision in August 2025 and Apple's critical choice on retaining Google as Safari's default search provider.
While challenges abound, clarity from the DOJ and Google's continued operational strength could reassure investors.
With Alphabet's stock trading at a discount compared to its peers, Anmuth's bullish stance signals confidence in Google's ability to navigate both courtroom battles and Wall Street expectations.
