Google Gets to Keep Chrome. Should You Buy the Pop in GOOGL Stock?

Alphabet (GOOGL) shares closed nearly 9% higher today after the company secured a major victory in an antitrust lawsuit originally filed against it in 2020. 

On Wednesday, a U.S. federal judge, Amit Mehta, allowed Google to retain its Chrome browser and preserve its vital $20 billion annual search partnership with Apple (AAPL). 

Today’s rally in Google stock builds on the massive gains it has already notched over the past four months. Versus early April, the so-called “Magnificent 7” stock is now up well over 60%. 

Should You Buy Google Stock After the Federal Court Ruling?

Alphabet shares appear particularly attractive as a long-term holding following the removal of this regulatory overhang. 

They are, in fact, a quintessential example of growth at a reasonable price (GARP). In its latest reported quarter, the tech behemoth saw its revenue come in up 14% on a year-on-year basis.  

Still, GOOGL stock is currently going for a forward price-earnings (P/E) ratio of about 21x only, representing a significant discount to both the broader tech sector as well as its mega-cap peers. 

This valuation discrepancy suggests potential for multiple expansion as markets reprice Alphabet in light of the improved regulatory clarity.

GOOGL Shares Could Soon Reclaim Their Historical Premium

Bank of America analyst Justin Post reiterated his “Buy” rating on GOOGL shares following the federal court ruling on Wednesday. 

In his research note, Post cited “evidence of Gemini progress and search usage growth” as potential catalysts for multiple expansion toward historical premiums. 

The BofA analyst raised his price target as well to $252, indicating potential upside of another 10% in Google stock from current levels.  

Alphabet currently pays a dividend yield of 0.37% and has a rather lucrative $70 billion stock buyback program in place, which makes GOOGL stock even more exciting to own for the longer term. 

Google Remains a ‘Buy’-Rated Stock Among Wall Street Analysts

Google’s strong positioning across search, YouTube, and cloud computing, combined with its fast emerging AI capabilities, is keeping other Wall Street analysts bullish on its stock as well. 

According to Barchart, the consensus rating on GOOGL stock currently sits at “Strong Buy.”