Opinion: Google's Latest Antitrust Ruling Is a Big Win for Alphabet Investors

Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) dodged another legal bullet on Wednesday, which could result in a big return for investors. A federal judge ordered Google to change its system that powers its digital advertising monopoly, but stopped short of requiring the company to sell parts of its adtech business, as requested by the U.S. government.

The last time a judge rejected the DOJ’s request to force Google to sell part of its company was exactly one year ago, on Sept. 2, 2025. Alphabet stock jumped 16% in the month following that ruling, and has risen more than 55% in the last year.

I think this week's ruling could be a similar catalyst, with investors breathing a sigh of relief.

Image source: Alphabet.

About this week's adtech ruling

This week's decision by U.S. District Judge Leonie Brinkema in Virginia will remain under seal for 14 days so lawyers from both sides can review it and propose any changes to the specific remedies sought by the court.

"We're very pleased the Court rejected the DOJ's proposal to break apart tools that help small businesses reach new customers and grow," Google vice president for regulatory affairs Lee-Anne Mulholland said.

In the previous lawsuit, Google's search engine was declared an illegal monopoly in 2024, and the Justice Department had sought a penalty requiring the company to sell its Chrome browser -- the world's most popular browser, with more than 69% of the global market share.

But on Sept. 2, 2025, Judge Amit Mehta instead barred Google from entering into exclusive distribution agreements that made its search engine the default in web browsers. He also required Google to share search index data and user interaction data with competitors.

In this separate lawsuit that was filed in 2023, Brinkema ruled in 2025 that Google illegally monopolized parts of the technology connecting publishers selling online ad space with advertisers buying it. But in this week's ruling, she rejected the DOJ's bid to require Google to sell parts of its ad technology.

Why is the adtech ruling important?

Selling off parts of the adtech business could have been a disaster for Alphabet. One of the company's biggest assets is its powerful advertising engine, which generated $81.63 billion in revenue in the second quarter, up 14% from a year ago.

Google Search is the biggest generator of advertising revenue, bringing in $63.27 billion in Q2 revenue, up 16.7% from a year ago. YouTube advertising generated $11.05 billion, up 12.8%, and Google Network, which includes ads on partner websites, brought in $7.3 billion, down less than 1%.

And that money is critical for Alphabet as it aggressively builds out its AI cloud infrastructure. Alphabet spent $44.9 billion in Q2 alone on capex, and free cash flow fell to negative $5.9 billion.

Analysts have high expectations for Alphabet stock. Revenue estimates for the next quarter are a little over $141 billion, up 23.9% from a year ago. Full-year revenue is expected to be $498 billion, up 23.6% from 2025, and 2027 is expected to be even better, at $609.9 billion, according to consensus estimates.

Alphabet needs its advertising engine to run unencumbered to help fund its massive capex plans -- estimated at $175 billion this year alone and likely to rise in 2027. This week's ruling removes the immediate threat -- and gives investors another reason to rest easier.

Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.