Google-parent Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) has laid out its remedies proposal in the high-stakes search distribution case with the Department of Justice (DOJ).

JPMorgan analyst Doug Anmuth notes that Google's focus on non-exclusivity and increased flexibility aligns with its strategy to limit regulatory overreach. However, investors should also turn their attention to Google's operational strength, which could be a significant driver of long-term value.

Alphabet's Remedies In DOJ Case

Google's proposal, filed on Dec. 20, sidesteps the harsher measures suggested by the DOJ, such as divestiture of Chrome or Android. Instead, the company's remedies focus on removing search exclusivity in browser and Android agreements and giving partners greater flexibility.

This should allow partners like Apple Inc. (NASDAQ:AAPL) and mobile carriers to preload multiple search engines. This shift could create opportunities for competitors, including Microsoft Corp (NASDAQ:MSFT), to vie for top spots.

Anmuth expects the judge's final decision in August 2025 to strike a balance between the DOJ and Google's proposals, likely considering user impacts. Still, the timing of remedy enforcement, appeals and potential injunctions adds uncertainty to financial implications.

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'Tremendous Innovation In AI', 'New Buyback' Likely

While the legal battle unfolds, Alphabet's fundamentals remain robust. Anmuth emphasizes that Alphabet is demonstrating "tremendous innovation in AI," which continues to bolster healthy Search and overall ad revenue growth.

The company's ability to "durably re-engineer the cost base and expand margins" further strengthens its financial position. Moreover, Alphabet "will likely announce a new buyback authorization at 1Q earnings," signaling confidence in future cash flows, says Anmuth.

Alphabet Among JPMorgan's 2025 Top Picks

JPMorgan sees Alphabet as "one of our 2025 Top Picks", alongside Amazon.com Inc (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META), and Spotify Technology SA (NYSE:SPOT). Anmuth projects a December 2025 price target of $232, supported by Alphabet's strong 30%+ operating income margin and double-digit percentage revenue growth.

Beyond ads, Alphabet's non-ad businesses like Cloud and YouTube subscriptions hold significant growth potential. Meanwhile, ventures like Waymo and Verily offer optionality for future value.

The Road Ahead For Alphabet Stock Investors

Investor focus is shifting toward how a new administration could influence final remedies due in March 2025. A potential settlement or adjustments in Apple's search agreements could also sway outcomes.

The court case may cast a shadow though Alphabet's core strengths are intact. Despite the regulatory noise, Alphabet stock remains a compelling play for investors seeking exposure to a leader in AI and digital transformation.

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