Key Morningstar Metrics for Alphabet
- Fair Value Estimate: $237
- Morningstar Rating: ★★★★
- Morningstar Economic Moat Rating: Wide
- Morningstar Uncertainty Rating: Medium
Alphabet Avoids Forced Divestiture of Chrome and Android
On Tuesday, Sept. 2, Justice Mehta published his proposed remedies in the Google Search antitrust case. Alphabet GOOGL won’t be required to divest Chrome or Android. The firm will not be allowed to have exclusive search agreements and will need to engage in modest data sharing with competitors.
Why it matters: The Google Search case and Justice Mehta’s remedies have been hanging over Alphabet’s head as the sword of Damocles. With this ruling, investors can breathe a sigh of relief, knowing that Justice Mehta did not propose structural remedies that could’ve been value-destructive.
- Our view, which we iterated in various notes published in August, October, and November of 2024, as well as in February, April, and July of 2025, was largely ratified by Justice Mehta’s judgment. We had previously highlighted that the likely remedies would be behavioral in nature.
- At the same time, even the imposition of these remedies is not immediate, with an Alphabet appeal to this case likely elongating the process by a few years. This elongation will occur as the search market continues to evolve, likely leading to an overall dilution of the proposed remedies.
The bottom line: We maintain our $237 fair value estimate as our base-case outlook, as the antitrust opinion published today largely upholds our outlook. With shares jumping 7% following the decision, we now view Alphabet as fairly valued, with the stock up more than 50% from its April lows.
- We believe that with this crucial remedies opinion out of the way, Alphabet can focus more clearly on its search business while aggressively integrating artificial intelligence features as the search market goes through a period of transformation from traditional to AI-first search.
