Google's Revival: Antitrust Ruling and AI Innovation Driving Valuation Reassessment

In the competition box of Technology giants, $Alphabet-C(GOOG.US)$ It has always occupied a core position, yet status is often challenged at the same time. Recently, however, we are facing a confluence of multiple benefits. In particular, the antitrust ruling issued by US Federal Judge Amit Mehta on September 2 not only avoided the harshest penalties against the company, but paved the way for its future development. This ruling has a positive impact not only on Google itself, but also indirectly on its partners. Meanwhile, Google's valuation remains relatively low, even though it has hit an all-time high, but with breakthroughs in AI technology and increased data center competitiveness, valuation corrections are on the way. This article will revisit these key focuses and analyze Google's latest investment potential. (Last review was Q2 results”AI Business Has Failed, Continued Bullish After Yakuba Performance?“)

Positive Impact of Antimonopoly Ruling

The DOJ lawsuit against Google's search can be traced back to 2023, and the core of the case is that Google maintains support locations in other search markets through large payments. In 2024, the Court ruled that Google is illegal to invalidate the online search and advertising market, but the ruling of September 2, 2025 avoids the most extreme structural changes to force the sale of the Chrome browser or Android system. This result was seen as a major boon to the market, with Google's share price rising by nearly 7% after the announcement, reflecting investors' enthusiasm for the stability of the company's core business.

In other words, the decision allows Google to maintain other key agreements with Apple. Google pays Apple more than $26 billion a year to ensure its Search Engine is the preferred choice for Safari browsers on iPhones, iPads and Macs. These tablets pay 15-20% of Apple's profits, a major source of Apple's income. However, it is necessary to prohibit Google from subscribing to the independent advice of removing competitors, and to share partial search data with competitors, such as $Microsoft(MSFT.US)$ Bing, however, does not end its partnership with Apple. Conversely, the market is more competitive and Google's ad revenue remains stable. As far as Google is concerned, it seems that other core advertising businesses will not suffer a damaging blow. THE COMPANY BORROWS TO PROVIDE STEADY CASH FLOW AND CONTINUE TO INVEST IN AI AND CLOUD SERVICES.

$Apple(AAPL.US)$ The stock price is the same on the right side. After the close, Apple's share price rose by nearly 3%, avoiding the divestment of revenue sources. If the deal is not agreed, Apple could lose tens of dollars in revenue and need to find an alternative Search Engine, which would increase the diversity of other operations.

In addition, a recent earnings report noted that Google's AI Search Product AI Overviews have not expanded, which will benefit the company from maintaining a strong lead over Search Engines.

Nano Banana Launch: AI Technology Challenges OpenAI

In AI, Google's innovation has accelerated, notably the Nano Banana (formally known as Gemini 2.5 Flash Image), launched on August 27, 2025, which quickly became the focal point of the AI image editing model. It takes the lead in LMARENA's battle mode, overtaking OpenAI's Dall·E and ChatGPT image features. The success of Nano Banana is in its high efficiency and consistency: with only 1-2 seconds of response time, support for multicycle editing, and maintaining the coherence of characters and styles. This solves the problem of partial changes common to rival hands in multiple edits, and user reports have a first trial success rate of over 90%. This move reinforces the market's confidence in Google AI capabilities. Nano Banana is not only for personal creation (such as photo editing), but also for commercial branding, such as E-Commerce product image generation and advertising material production.

In fact, the market doesn't just think OpenAI is challenged, and even image AI generation tools like $MEITU(01357.HK)$ either $KUAISHOU-W(01024.HK)$ The Nikkei is also being challenged, causing investors to worry (including pen holders), which are believed to be the reason for the weakening of the stock price short line.

Morgan Stanley Report: Data Center Competitiveness of ASIC Chips

The last point is the research report published by Morgan Stanley in August, but the report is based on Bullish Chinese Semiconductor behavior, while the content of the issue and Google's latest ASIC chip in its data center operations are facing strong competition.

Google's TPU v6e pod, designed specifically for AI workloads, shows data center profitability in the entire test, ranked second only to $NVIDIA(NVDA.US)$ The GB200 is at the same time the highest performance in ASIC chips. Google's ASIC outperforms competitors in terms of energy efficiency and scalability, expected by 2026, $Taiwan Semiconductor(TSM.US)$ Will provide 90% advanced process support for Google. This not only reduces operating costs, but also strengthens Google Cloud's market share.

Low valuation but with room for correction

The share price has reached a new all-time high, but the company's current PE is below the historical average, well below the Technology Industry average and below other historical highs. By comparison, competitors such as Microsoft have a P/E of 37. Part of this low valuation is due to the speed at which the market reacts to risk. However, as the solution evaporates, this amount is going back to correct the creation space for value estimation.

Google's undervaluation ignores its potential in AI and cloud services. Google Cloud's revenue growth accelerates to 31% in the first half of 2025, far surpassing $Amazon(AMZN.US)$ 17.5% of Web Services. The company plans to invest $85 billion in AI and data centers by 2025, which will strengthen its long-term competitive advantage.

Small summary

Google's Pixel line of products (as the Pixel 10 continues to strengthen AI integration to strengthen other consumer electronics platforms. Personally, Google in the short term is still at a historical high, but it is worth continuing to invest in the symbol again and again. Reflecting the merits of the decision, the low valuation position, the impact of Nano Banana's AI and the competitive strength of the ASIC chip will drive the stock up.

In the end, US stocks came close and there was no upside, just a short line sale of highly valued stocks. Google, which is supported by many benefits, is high in innovation, market risk aversion, and unimaginably high, and AI-tech is leading the way in a range of topics.

Futu Securities, Chief Analyst, Hui Chi-Lok

(The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the proposed issuer of shares)