Alphabet Inc. (GOOGL) Stock: Chrome Divestiture Could Trigger 25% Stock Drop

TLDR

Table of Contents

Alphabet stock could drop 15-25% if Judge Amit Mehta orders Google to sell Chrome browser in antitrust case
Chrome has 4 billion users and represents 35% of Google’s search revenue, making divestiture a major financial blow
Barclays analysts say AI companies like OpenAI, Anthropic or Perplexity could be potential buyers of Chrome
Judge’s decision expected in August after DOJ wrapped up closing arguments on Friday
Alphabet shares already down 10.6% year-to-date and fell 1.4% Monday on divestiture concerns

Alphabet faces its biggest regulatory threat as a federal judge considers forcing Google to sell its Chrome browser. The decision could wipe out up to 25% of the company’s market value.

The tech giant lost a landmark antitrust trial in August against the US Department of Justice. Judge Amit Mehta found Google guilty of monopolizing the search engine market.

On Friday, Google and the DOJ finished closing arguments in the remedies phase. The DOJ wants Mehta to force Google to sell Chrome and share search data with rivals.

Google may be forced to sell the Chrome browser to break up what U.S. courts deem monopolistic practices
Yahoo is willing to pay over $10,000,000,000 dollars to buy Chrome if Google has to sell it pic.twitter.com/ma5L9TpgVL
— Dexerto (@Dexerto) April 26, 2025

Barclays analyst Ross Sandler said the probability of a Chrome divestiture has increased after the closing arguments. He called it a potential “black swan event” for Alphabet shares.

Chrome has 4 billion users worldwide. The browser generates 35% of Google’s search revenue according to Sandler’s analysis.

“This would be a major blow to Google,” Sandler wrote in a Monday note. He said shares would “obviously trade off” if a divestiture happens.

Market Impact and Stock Performance

Alphabet stock dropped 1.4% on Monday and was slightly lower in premarket trading Tuesday. Shares are down 10.6% year-to-date.

Sandler estimates a Chrome divestiture would cut Alphabet’s earnings per share by 30%. He maintains an Overweight rating on the stock despite the risks.

“No investors we speak to are thinking this remedy plays out,” Sandler said. The analyst believes the market hasn’t priced in this possibility.

The stock recently tested its 100-day moving average near $167. Technical indicators show pressure on the shares as investors weigh regulatory risks.

Potential Buyers and Timeline

Sandler identified “well-funded AI companies like OpenAI, Anthropic or perhaps Perplexity” as likely Chrome buyers. These companies could use the browser to challenge Google’s search dominance.

Judge Mehta is expected to decide on remedies in August. Google said Saturday it will appeal any unfavorable ruling.

The DOJ also wants to ban exclusivity agreements that make Google the default search engine on devices. These deals help Google maintain its search market share.

Separately, Alphabet agreed to spend $500 million Monday to settle shareholder claims about antitrust violations. The settlement requires changes to the company’s compliance structure.

Chrome’s divestiture would impact more than just search revenue. The browser helps Google collect user data for advertising and AI development.

The case represents the government’s most aggressive antitrust action against a tech company in decades. The remedy could reshape how Google operates its core business.

Google argued in court that breaking up Chrome would harm consumers and innovation. The company said its search quality benefits users worldwide.

The timing coincides with increased AI competition from companies like OpenAI and Microsoft. A Chrome sale could accelerate this competitive pressure.

Alphabet’s legal troubles extend beyond the search case. The company faces other antitrust investigations in the US and Europe.

The August decision will determine whether Google can keep its integrated search and browser business model. Wall Street is watching closely for any signs of the judge’s thinking.

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