Stocks Of Google And Apple Downplay Antitrust Ruling; This Is Why Investors Are Upbeat
Big tech investors don’t seem to be deterred by antitrust regulators. According to The Information, Google’s parent firm Alphabet saw only a slight decline in its stock price following Judge Amit Mehta’s ruling that the business had broken antitrust rules in order to keep its search monopoly.
Even less of a reduction was seen for Apple, which the verdict may have a substantial influence on. After already declining before to the decision, the stocks of both companies dropped by almost 5% during the day’s trading as a result of a general market decline.
Judge Mehta upheld Google’s monopoly on online search, which is maintained by exclusive agreements with Apple and other companies to be the search engine that appears by default on iPhones and Android smartphones. “The court concludes that Google is a monopolist and has behaved as such to maintain its monopoly after carefully evaluating and weighing the witness testimony and evidence,” he stated. “The Sherman Act’s Section 2 has been violated.”
However, considering competition from companies like Amazon, the judge determined that Google did not have a monopoly in search advertising.
Investors Appear Hopeful About Google’s Future Despite The Judgment
The market is left to guess as the judge has not yet decided what the “remedies” for the antitrust violation will entail. Giving customers an option for the default search engine when configuring new phones is one possible fix; Google has done this in Europe without losing market share.
Apple is deeply involved even though it isn’t sued directly. According to the verdict, Google pays Apple a substantial amount to continue serving as the default search engine on iPhones. This amount is estimated to reach $20 billion by 2022, or 17% of Apple’s operating profit. Both businesses would be impacted if Google were to stop making these payments and lose its exclusive status.
President of worldwide affairs Kent Walker said in a message to the public, “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”
Wall Street Witnessed Carnage As The Dow Jones Plummeted
Last week, US stocks were brutally destroyed. The Dow Jones Industrial Average fell more than 1,000 points, and the S&P 500 and Nasdaq fell more than 3%. As recession fears grew, Wall Street plunged like this almost two years ago, but Capital Economics says AI’s growth story is still intact. However, the growing concern is that this is slowing down the US economy.
The overall market saw a notable, though possibly manageable, downturn. The S&P 500 plummeted 3%, and the Nasdaq Composite fell 3.4%. Only 101 times since 1993 has the S&P experienced a decline of 3% or more. In contrast, The Information reported that Japan’s market experienced its worst day since 1987.
More than expected, Nvidia’s shares dropped 6.4% following the announcement of a delay in its new AI processor. After accounting for a June stock split, Nvidia ended the day slightly above $100, in line with its May position.
