An impending decision on the Department of Justice’s antitrust case against Google could mean a pullback for Alphabet shares in the coming months, according to JMP. The firm downgraded the tech giant to market perform from market outperform, citing the risk of antitrust penalties that it believes could “significantly impact” Google’s U.S. distribution of search and its revenue. The move comes after a federal judge ruled in August 2024 that the company illegally held a monopoly in both search and text advertising . Following that ruling, the DOJ has called for Google to divest its Chrome browser as a remedy. “With a final ruling expected by August 2025, we expect this case to be a primary focus for investors in the year ahead, limiting multiple expansion,” analyst Andrew Boone wrote in a Thursday note to clients. Adding that there hasn’t been a “good” remedy presented to the judge, Boone said that there is an increased risk that any punishment against the tech company will be “severe.” With that in mind, he sees the court possibly forcing Google to break up Android and Chrome — and prevent the company from offering revenue share payments. “With a best-case scenario likely limiting Google’s ability to offer revenue share contracts for distribution of search in the U.S., we are comfortable moving to the sidelines after shares returned 37% in 2024 as we await greater legal clarity before becoming positive again, and see shares as fairly valued,” the analyst continued. As a result, Boone thinks Google losing search access point distribution could shave $1.15 from 2026 earnings per share. That said, a majority of analysts on Wall Street are still bullish on Alphabet. Of the 58 that are covering the megacap tech company, 47 have a strong buy or buy rating, per LSEG data. Its average target of roughly $208 implies nearly 10% upside from Tuesday’s close. In the past 12 months, the stock has outperformed the broader market, gaining around 37%.
JMP downgrades Alphabet due to headwinds from DOJ antitrust case