Shares of Alphabet (GOOGL), the parent company of Google, have seen a rise today after news emerged that the Chinese government has ended its antitrust investigations into Google’s operations.
Legal Concerns Lifted
As reported by Financial Times, China’s market regulator, which started looking into Google in February, has opted to discontinue the inquiry.
Google faced allegations of breaching China’s antitrust laws, but details regarding any potential violations were not disclosed by the regulators at that time.
It’s worth noting that Google’s services, like search engines, are restricted in China, accounting for roughly 1% of its global income. Nonetheless, the company collaborates with Chinese advertisers.
As illustrated, the Asia-Pacific region contributes a modest share to the overall revenue.
There’s speculation that this decision to shut down the investigation could be tied to ongoing trade discussions between Beijing and the Trump administration. However, Google hasn’t received official notification regarding the closure of the probe.
Nvidia Under Scrutiny
This shift suggests a move away from monitoring Google, as regulatory attention now appears to be directed at semiconductor leader Nvidia (NVDA). Recently, reports indicated that the Chinese government asked Hi-Tech Titan to halt Nvidia chip purchases to bolster domestic manufacturing capabilities, aiming to compete with the US.
Nvidia has also been charged with infringing antitrust laws.
The notion here seems to be that China might leverage Nvidia regulations during trade negotiations while showing some willingness to adapt following Google’s situation.
The backdrop to these trade talks includes significant tariffs imposed on China by President Trump earlier this year, which prompted China to retaliate with its own tariffs and increased scrutiny on US tech companies.
Compounding these issues are geopolitical tensions, as both nations strive for economic, technological, and military superiority.
Is Google a Worthwhile Investment Now?
At TIPRANKS, there’s a strong buy consensus for GOOGL based on 28 buy ratings and 9 holds. The highest price target is set at $300, while the consensus suggests a price of $235.97, indicating a slight potential decline of 5.43%.
