Barclays has identified a substantial risk for Alphabet's stock due to the ongoing antitrust trial regarding its monopoly on online search. Analysts suggest that a worst-case scenario could force Alphabet to sell its Chrome browser, which is integral to its revenue. This 'black swan' event could result in a stock decline of up to 25%. Notably, Chrome contributes 35% of search revenue and has a vast user base. Though the chances of such a divestiture are viewed as low, recent court discussions point to it being a feasible remedy, potentially interesting other tech firms like OpenAI.
In a worst-case scenario regarding the ongoing antitrust trial, Barclays analysts warn that a forced divestiture of Chrome could lead to a significant stock drop for Alphabet.
The divestiture of Chrome could cut Alphabet's earnings-per-share by over 30%, heavily impacting stock prices with estimates of a potential decline between 15% to 25%.
Although the likelihood of selling Chrome is perceived as low, analysts at Barclays highlighted that the judge's recent comments suggest it could be a 'cleanest' remedy.
Other tech companies, including OpenAI, have expressed interest in acquiring Chrome if Alphabet is compelled to sell the platform.
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