Google's Antitrust Win Fuels Tech Rally as Megacaps Hit $21 Trillion Market Cap, Broadcom Soars on AI Chip Deal, While Nvidia and Tesla Lag

Google led a powerful rally across the tech sector this week, helping drive the megacap group to a combined market capitalization of $21 trillion. The surge came amid a surprising twist in the long-running antitrust battle involving the U.S. government and Big Tech. Alphabet, Google’s parent company, saw its stock jump 9% on Wednesday following a key ruling from U.S. District Judge Amit Mehta in the government’s antitrust case. The decision, while finding Google guilty of maintaining an illegal monopoly in online search, stopped short of forcing the company to sell its Chrome browser. Instead, the judge ordered Google to share search data with competitors, a move seen as a more targeted remedy. This outcome eased major regulatory concerns that had weighed on investor sentiment. The relief extended to Apple, which benefits from a lucrative agreement with Google to be the default search engine on iPhones. Analysts at Wedbush Securities said the ruling removed a "huge overhang" on both companies, clearing the way for deeper collaboration, particularly in artificial intelligence. They noted the decision could pave the way for Apple to expand its partnership with Google’s Gemini AI models. Judge Mehta cited the rise of generative AI as a key factor in his decision, pointing to new entrants like OpenAI, Anthropic, and Perplexity that have disrupted the traditional search landscape. He acknowledged that AI could be a game changer, reducing Google’s dominance in the market. Despite the positive news, Alphabet faced another setback on Friday when it was fined 2.95 billion euros ($3.45 billion) by the European Union for anti-competitive practices in its ad tech business. However, investors largely shrugged off the penalty, focused instead on the domestic ruling. Meanwhile, Broadcom surged 13% this week, pushing its market cap to around $1.6 trillion and making it the newest member of the trillion-dollar club. The gain followed a strong earnings report, during which CEO Hock Tan revealed a new $10 billion contract with a major AI client. Multiple sources, including the Financial Times, identified the customer as OpenAI, marking Broadcom’s fourth major AI chip deal after partnerships with Google, Meta, and ByteDance. Analysts at Barclays praised the company’s momentum, citing strong growth prospects and a robust backlog, maintaining their buy rating and raising their price target. In contrast, Nvidia’s stock dropped more than 4% in the shortened holiday week, marking its fourth consecutive weekly decline despite no negative news. The chipmaker remains the largest company by market cap at over $4 trillion, up 56% in the past year. Microsoft also declined this week, falling for five straight weeks, though it’s still up 21% over the past 12 months. Tesla, meanwhile, has struggled this year, down 13% due to declining sales amid fierce competition from lower-cost Chinese EV makers and a lack of product refreshes. However, Tesla shares rose 5% on Friday after the company announced a new executive pay plan for Elon Musk. The plan, if approved by shareholders, could deliver payouts worth up to nearly $1 trillion, tied to milestones including a market cap of $2 trillion. Tesla Chairwoman Robyn Denholm said the proposal aims to keep Musk focused on driving long-term value.