Alphabet Inc Class A (NASDAQ:GOOGL) stock rose 0.9% (As on September 9, 11:25:43 AM UTC-4, Source: Google Finance) after Phillip Securities downgraded the company to Accumulate from Buy with a price target of $265, up from $235. The firm views the U.S. district judge ruling positively and believes restrictions on exclusivity will have limited impacts on Google’s product strength and partner incentives, but cites valuation for the downgrade following the stock’s recent rally. In 2024, the court found Google had maintained an illegal monopoly in search services and text advertising through exclusionary conduct. But the most severe penalties sought by the DOJ — including a forced sale of the Chrome browser and restrictions on Android — were rejected. Instead, the ruling barred Google from entering into certain exclusive agreements and required it to share parts of its search index and user-interaction data. The decision was seen as far less disruptive to Google’s business model than feared, fueling investor relief. Mehta ordered the parties to reconvene by Sept. 10 to finalize the judgment. Investors viewed the outcome as leaving minimal consequences for the company. Phillip Securities echoed that sentiment, saying the restrictions are unlikely to erode Google’s competitive position
Meanwhile, the brokerage kept its full-year 2025 (FY25) revenue forecast unchanged but lowered its weighted average cost of capital from 7.7% to 7.4%, citing improved sentiment after the court decision. The analyst expect GOOGL to continue benefitting from AI-driven product enhancement and operational efficiencies. In his decision last Tuesday, Mehta said Google may continue paying to have its products preloaded, but it cannot tie those payments or licensing agreements to exclusivity.
On the other hand, Consolidated Alphabet revenues in Q2 2025 increased 14%, or 13% in constant currency, year over year to $96.4 billion reflecting robust momentum across the business. Google Search & other, YouTube ads, Google subscriptions, platforms, and devices, and Google Cloud each delivered double-digit growth in Q2. Google Services revenues increased 12% to $82.5 billion, reflecting strong performance across Google Search & other, Google subscriptions, platforms, and devices, and YouTube ads. Google Cloud revenues increased 32% to $13.6 billion, led by growth in Google Cloud Platform (GCP) across core GCP products, AI Infrastructure, and Generative AI Solutions. Total operating income increased 14% and operating margin was 32.4%. Operating margin benefited from strong revenue growth and continued efficiencies in the expense base, partially offset by a charge related to a settlement in principle of certain legal matters.