Google Stock Up After Judge’s Muted Penalty. No Need To Buy $GOOG

A man dressed as Monopoly board game character “Milburn Pennybags” is seen outside the E. Barrett Prettyman Courthouse in Washington, DC, on September 12, 2023. A landmark case pitting the US government against Google over the dominance of the company’s world-dominating search engine kicked off in a Washington courtroom on September 12, 2023. Over the course of 10 weeks of testimony involving more than 100 witnesses, Google will try to persuade Judge Amit P. Mehta that the landmark case brought by the Department of Justice is without merit. (Photo by Mandel NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)

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Google stock is up nearly 9% this afternoon.

That’s after U.S. District Court for the District of Columbia Judge Amit Mehta imposed lighter than expected penalties after finding Google guilty of violating Section 2 of the Sherman Act, where Google was found to have illegally maintained monopolies in general search services and search text advertising markets, according to Mehta’s ruling.

Mehta’s decision fell short of what investors expected – divestment of Google’s Chrome browser, I noted in an August 2025 Forbes post. “It’s a nothingburger,” said CEO of DuckDuckGo Gabriel Weinberg who testified against Google in the antitrust case, reported the New York Times.

The good news for Google is that the search giant does not have to divest its Chrome browser and it can still pay Apple for traffic acquisition costs to make Chrome the default — which is good for Apple and others to the tune of $26 billion.

The bad news is the decision requires Google to share search data with rivals — although I think Google will appeal Mehta’s and delay is as long as possible. Therefore, not much may change.

Google was happy about the judge’s decision – with reservations. Selling off Chrome “would have gone beyond the case’s focus on search distribution, and would have harmed consumers and our partners,” Google’s vice president of regulatory affairs Lee-Anne Mulholland wrote in a blog post featured by NPR.

Still, she wrote, the tech giant is reviewing the order closely, and has concerns that being required to share search data with rivals “will impact our users and their privacy.”

My concern is that Google – which in 2017 published a groundbreaking paper about Transformers which are the basis for ChatGPT’s technology – faces significant cultural barriers to prevailing over its faster growing rivals.

With Google stock trading above Wall Street’s price target, I see no compelling reason to invest.

Judge Mehta’s Decision: What He Did, What He Did Not Do, Who Benefits

Google shareholders are breathing a sigh of relief after a federal judge spared the tech giant from the harshest possible punishment for violating federal antitrust law: a breakup.

Explaining why he declined to order a divestiture of Chrome, Mehta wrote in his ruling, “The court’s task is to discern between conduct that maintains a monopoly through anticompetitive acts as distinct from ‘growth or development as a consequence of a superior product, business acumen, or historic accident.'”

“After two complete trials, this court cannot find that Google’s market dominance is sufficiently attributable to its illegal conduct to justify divestiture,” he continued. Such a divestiture would be “incredibly messy and highly risky,” Mehta added.

While the Justice Department praised Tuesday’s ruling as a win for competition in Silicon Valley, efforts to constrain the power of Big Tech may not make much of a difference, noted the Times.

Mehta’s ruling required Google to address its illegal monopoly over web search through the following steps, according to DealBook:

• Stop paying makers of web browsers and smartphones for exclusive rights to provide search, and from requiring its other products to be bundled on a device
• Share some of its search data with “qualified competitors,” potentially including rivals like Microsoft and DuckDuckGo

Mehta did not require Google to sell its Chrome browser, “something the government had called for, or block it from paying for prime — but not exclusive — placement of its search engine,” DealBook wrote.

Google’s 9% stock increase in the wake of the ruling suggests the search giant came out of Mehta’s ruling as a winner. Meanwhile, Apple’s shares rose 3% since it will not likely lose the $20 billion Google paid the iPhone maker for making Chrome its default browser. And Mozilla, which gets most of its U.S. revenue from a deal that makes Google the default search provider for its browser, is another beneficiary, DealBook wrote.

How Well-Capitalized AI Chatbots Spared Google A Harsher Penalty

AI is undermining Google’s core source of revenue. Specifically, Google’s search advertising business is already under attack because ChatGPT, Perplexity, and Claude — my favorite AI chatbots — are offering consumers a search engine that enables much more sophisticated information requests coupled with deep research that often incorporate hundreds of documents — most of which seem to be from credible sources.

The AI boom may have spared a harsher penalty for Google. Mehta specifically cited the rise of stiff competition from generative AI companies as influential in his ruling. Such chatbots have unusually deep pockets for startups. For instance, on September 2 Anthropic said it had raised $13 billion at a $183 billion valuation, DealBook reported.

“These companies already are in a better position, both financially and technologically, to compete with Google than any traditional search company has been in decades (except perhaps Microsoft),” Mehta wrote.

Google’s AI mode is nowhere near as useful for me and I am guessing that Google’s existing business model will constrain the company’s ability to catch up to and surpass those AI rivals.

Can Google Surpass Its Chatbot Rivals?

Google is behind in enterprise AI chatbot adoption. For instance, Anthropic holds 32% of the enterprise large language model market share by usage, while OpenAI – which enjoys the strongest brand – has 25% of that market, noted TechCrunch.

AI is cutting into Google’s growth. Google Search queries in Safari declined for the first time in 22 years, likely due to GenAI chatbots, Apple’s Eddy Cue testified. Moreover, tens of millions of people now use ChatGPT, Perplexity, and Claude for information gathering previously done through search, noted Mehta’s ruling.

While Google has technical capabilities, it lacks the chatbot-specific momentum and user loyalty that ChatGPT has built. ChatGPT’s lead in users and mindshare makes it unlikely Google will overtake OpenAI in the near term.

Google’s inability to gain chatbot momentum stems from deep organizational and cultural factors that are difficult to change in a large, public company, according to Inc.

While Google has the technical capabilities through its TPU infrastructure and DeepMind research, it lacks the organizational agility, risk tolerance, consumer focus, and startup mentality that have enabled OpenAI and others to dominate the chatbot market, The Pragmatic Engineer reported.

Google’s preference for perfection over speed, reactive rather than proactive product development, and enterprise-focused culture fundamentally conflict with the requirements for chatbot success in the consumer market.

Where Will Google Stock Go From Here?

Analysts see Google shares as overvalued. For example, 35 analysts set an average price target of about $218 per share, according to TipRanks, making the stock some 6% over-valued.

Given the cultural barriers to overtaking rapidly growing AI chatbots, I would be in no hurry to buy Google stock.

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