Google stock on knife’s edge as DOJ threatens to break Google monopoly

Google stock has been on a downward slide this week after regulators accused the internet giant of monopolizing the search market.

On Nov. 22, Alphabet hit a one-month low of $166.57 While it has slightly recovered since, GOOG remains down over 7% in the last two weeks, closing at $170.82 on Nov. 28.

Alphabet's woes began after a Department of Justice (DOJ) filing on Nov. 21 that called for Google to sell its Chrome web browser as part of a sweeping antitrust probe.

The DOJ also proposed limits on Android’s ability to bolster Chrome at competitors’ expense.

A forced sale of Chrome would “permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet,” DOJ lawyers argued in the filing.

The DOJ's proposal comes more than three months after a U.S. district judge ruled that Google had violated antitrust laws by spending billions to dominate the search market.

This isn’t the DOJ’s first shot at Alphabet.

In January 2023, it filed suit over Google’s alleged monopoly in digital advertising technologies, accusing the company of using acquisitions and auction manipulation to suppress competition.

Hearings on potential penalties are set to begin in April. According to PBS, the DOJ’s recommendations, if enforced, could reshape Alphabet entirely.

The proposed measures include selling Chrome within six months—though Google would almost certainly appeal such a decision.

Google stock thrives beyond regulatory hurdles

Despite regulatory challenges, Alphabet continues to deliver strong earnings that have propelled its market cap to nearly $2.1 trillion.

In its latest quarter, Alphabet posted per-share earnings of $2.12 on $88.27 billion in revenue, beating Wall Street’s estimates of $1.85 and $86.3 billion, respectively.

YouTube ad revenue, Google Cloud revenue, and traffic acquisition costs also came in above expectations. Meanwhile, the search business—central to the DOJ’s case—generated $49.3 billion in quarterly sales.

Like other tech giants, Alphabet is all-in on AI. Capital expenditures surged 71.9% last quarter to $13.06 billion, with much of that directed toward AI infrastructure.

Those investments are already paying off, according to Chief Business Officer Philipp Schindler.

Shindler notes that AI improvements are delivering better YouTube recommendations, enabling the platform to “recommend more relevant, fresher, and personalized content to viewers.”