Alphabet Inc. (NASDAQ: GOOGL) shares soared by over 8% in trading on Wednesday, a sharp rally driven largely by a landmark court ruling that spared the company from having to sell its Chrome browser, a key part of its ecosystem. The ruling from Judge Amit Mehta removed a significant cloud of uncertainty, lifting investor confidence and pushing Alphabet’s valuation higher by more than $150 billion within a short period. This dramatic market reaction reflects the importance of the ruling for Alphabet’s ongoing business and growth prospects, particularly as it continues to leverage its core services in search, advertising, cloud, and AI.
The court decision found that forcing Alphabet to divest Chrome and Android would have been a “poor fit” for promoting competition. The judge reasoned that these assets, while important, were not the direct cause of Google’s dominance in search and breaking them up would disrupt millions of users and business partners without fundamentally solving the antitrust concerns. This outcome essentially preserved Google’s vast distribution platforms and underpinned its robust business model.
Alphabet’s strong stock performance this week also builds on the company’s solid financial results from the second quarter of 2025. Alphabet reported a 14% year-over-year revenue increase, reaching $96.4 billion. Growth was broad-based: Google Search and other services, YouTube ads, Google subscriptions, and Google Cloud all delivered double-digit revenue gains. Notably, Google Cloud surged 32% to $13.6 billion in revenue, powered by demand for its cloud platform, AI infrastructure, and generative AI solutions, and earnings came in at $2.31 per share, beating analysts’ estimates and marking a 22% increase from the prior year.
Alphabet CEO Sundar Pichai highlighted AI as a key driver behind the company’s impressive growth, stating that AI is affecting every part of the business, from enhancing search features to powering cloud solutions. The company is investing heavily in its cloud and AI infrastructure, increasing capital expenditures for 2025 to approximately $85 billion to support this expansion. Despite this elevated spend, Alphabet remains confident about the long-term opportunity these investments will unlock.
The court ruling removed a major regulatory overhang that had been weighing on the shares for some time. By avoiding a forced breakup, Alphabet keeps control over critical distribution channels that not only drive search dominance but also fuel ad sales and subscriptions across multiple digital platforms. With the ongoing growth in AI-powered services and an expanding cloud business, the stock surge reflects a renewed market optimism about Alphabet’s prospects in the rapidly evolving tech landscape.
