Bank of America has grown more optimistic on technology giants Alphabet and Apple after a US court ruling spared Google from a potentially major breakup in its long-running antitrust battle.
The decision allows Google to maintain its search distribution model while avoiding the divestiture of key assets, which analysts see as a positive development for both companies.
Antitrust ruling eases breakup concerns
Last year, Google was found to hold an illegal monopoly in internet search.
The US Department of Justice had pushed for tough remedies, including breaking up parts of the business, such as the Chrome browser.
However, US District Judge Amit Mehta rejected some of the most severe proposed consequences.
Alphabet will not have to divest Chrome, though the company will face restrictions on exclusive contracts with partners.
The ruling allows Google to continue paying companies, including Apple, for default search engine placement on devices such as the iPhone.
That clarity gave markets a boost: shares of Alphabet rose 6% in premarket trading on Wednesday, while Apple stock was last up about 3%.
Bank of America analysts called the judgment a significant relief for Alphabet.
“Since the potential for a Chrome divestiture seemed remote, our top takeaway is the judgment preserves Google’s ability to maintain its search distribution position through TAC [traffic acquisition costs] payments to partners,” wrote analyst Justin Post.
Price target revisions reflect optimism
Reflecting the improved outlook, Bank of America raised its price target on Alphabet to $252 per share from $217.
The new target implies a potential upside of 19% from current levels.
The analysts also highlighted Alphabet’s progress in artificial intelligence and search product innovation, pointing to its Gemini model as a catalyst for growth.
“We think continued evidence of Gemini progress and search usage growth can drive further multiple expansion for the stock toward historical premiums,” Post noted.
Apple also benefited from the outcome of the case. Bank of America raised its price target on Apple to $260 per share, up from $250, signaling a possible gain of about 13%.
Analyst Wamsi Mohan argued the ruling supports Apple’s services revenue trajectory.
While Google will be barred from exclusive contracts related to the distribution of its products, it can still pay for default placement on devices, subject to annual renewal.
Mohan added that Apple already gives users the option to change their default search engine, making the ruling’s practical impact limited.
Market impact and sector outlook
Shares of Alphabet have climbed 11% so far this year, underscoring investor confidence despite regulatory challenges.
Apple shares, by contrast, have declined 8% year to date, though the Bank of America upgrade signals renewed optimism for the company’s long-term growth prospects.
The court’s decision provides Alphabet with the flexibility to sustain its dominant search position while navigating regulatory constraints.
For Apple, the continued flow of search distribution payments strengthens the stability of its services segment.
With both companies retaining core revenue drivers, analysts view the judgment as a favorable outcome for two of the most closely watched names in technology.
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