[Analysis]: Court ruling says Alphabet's Google (GOOG/GOOGL) will not have to sell off Chrome or Android operating system

[Recapping the ruling]:

• A US judge ruled Google will not have to sell Chrome or Android in the monopoly case but must share search data with rivals and stop exclusive distribution contracts.


• The decision, seen as a relief for Big Tech, though Google still faces a separate ad tech monopoly case.


• The federal judge ruled that Google does not need to divest its Chrome browser in the DoJ’s antitrust case, calling a full divestiture “a poor fit”; the court accepted Google’s proposed remedies in full of some modifications and barred the company from entering exclusive internet search contracts.


• The US DoJ will be considering its options and weighing next steps regarding seeking additional relief after the search ruling.

Reaction details (13:03)

• 
  AAPL +4% pre-market


• 
  GOOGL +6% pre-market.

Analysis details (13:15)

Analyst Commentary on Apple and Google following the ruling:

APPLE (AAPL)

BofA raised Apple’s PT to USD 260 (prev. 250) and maintained its Buy rating.

• Said the DoJ-Google antitrust ruling was seen as a “win for Apple", as Google can no longer sign exclusive search and app distribution deals but can still pay for default placement annually.


• BofA raised Apple’s valuation multiple on stronger confidence in Services growth.

Citi said Apple is much better than feared after Google antitrust ruling.

• Stated antitrust ruling on Google removes a major overhang and downside risk on the Apple stock.

Citi notes Google is allowed to continue to pay Traffic Acquisition Costs (TAC) fees to Apple for it to be set as the default search engine so long as the deal is not exclusive, which means Apple:

• 1) can promote other search engines


• 2) can set a different search engine on different operating system versions or in a privacy mode and makes changes, if needed, on an annual basis.

Citi believes this could change pricing and help Apple negotiate the deal annually

TD Cowen states Apple search remedies leaves the Cos. ad revenues intact and supportive for future GenAI Rates.

• Views the remedies for GOOGL's Search business as largely favourable for AAPL ad revs as rev sharing and Safari search defaults can continue.


• TD adds on-exclusivity remedies allow Apple to license non-Google GenAI products (for example OpenAI).


• As mentioned, TD sees the remedies as largely favourable for AAPL's ad services business where third-party licensing agreements with GOOGL represent a low-20% of Service revenues and ~10% of total company gross profit.

JPMorgan says Google remedies remove overhang on Apple

• JPM notes Google is restricted from any exclusive agreements with Apple but not restricted from payments as part of revenue share for default placement.


• JPM believes a "robust" financial agreement will continue between Google and Apple even with the removal of exclusivity. JPMorgan has an Overweight rating on Apple shares.

Evercore says the Google ruling a 'net positive' for Apple

• Adds while the ruling will not only allow Apple to maintain receipt of its ~ USD 15-20bln payment from Google, but will also allow Apple to renew the deal each year, which gives Apple more leverage in search engine negotiations.


• Also paves the way for an eventual AI-enabled search engine becoming the default on Safari, whether that be with Gemini or another model.


• Maintains an Outperform rating on Apple shares and a PT of USD 250.

Wedbush said the ruling was a “monster win” for Apple (AAPL) and a “home run ruling” for Google

• Stated it removes a major uncertainty that had weighed on both stocks.

ALPHABET (GOOGL/GOOG)

Needham raises Alphabet PT to USD 260 (prev. 220)

• Said the "preliminary remedies" released by the District Court were far better for the Co. than expected.


• Needham estimates that this decision will save Alphabet USD 5-10bln/yr in lower revenue share fees paid to Apple (AAPL) and other distributors.

Oppenheimer raises Alphabet PT to USD 270 (prev. 235) and keeps an 'Outperform' rating

• Said the DoJ monopoly remedy is the best case outcome and removes the medium-term overhang on valuation/sentiment.


• Most importantly, Oppenheimer adds the Alphabet will not divest Chrome/Android and can continue to pay Apple (AAPL) for Search users, adding that Google and Apple can now also partner on AI.

03 Sep 2025 - 13:15- EquitiesExclusive- Source: Newsquawk