From Morningstar: 2024-10-10 06:04:00

The US Department of Justice released a remedy framework for the Google Search antitrust case against Alphabet (GOOGL/GOOG) on Oct. 8, including structural, contractual, and data-related remedies. The final proposal will be filed on Nov. 20, setting the tone for potential outcomes.

Key figures: Fair Value Estimate: $209, Morningstar Rating: 4 stars, Morningstar Economic Moat Rating: Wide, Morningstar Uncertainty Rating: Medium.

This antitrust case is crucial for Alphabet as remedies could impact Google Search, potentially leading to divestiture of Chrome and Android. Although unlikely, restrictions on exclusive agreements with companies like Apple and Samsung may be imposed. This outcome is not expected to significantly devalue Alphabet.

Alphabet’s fair value estimate remains at $209 per share, with the firm expected to handle antitrust challenges well. Despite headline risks, investors could find Alphabet shares attractively priced.

Alphabet’s strength in multiple markets, such as advertising, video, public cloud, and generative AI, positions it well to navigate the antitrust case. Diversification efforts away from search-based advertising, particularly investment in Google Cloud, are seen as value-accretive amidst increasing interest in AI.



Read more at Morningstar: Alphabet: DOJ Antitrust Case Eyes Google Breakup