Alphabet Stock: EU Charges Threaten Tech Giant's Growth

Alphabet's stock showed mixed signals on Wednesday as it initially gained 0.7% to $161.78 on NASDAQ, before facing pressure following European Commission allegations of two Digital Markets Act violations. The company now trades significantly below its 52-week high of $207.05 reached in February 2025. Despite these challenges, Alphabet demonstrated strong financial performance with earnings per share increasing to $2.17 in the latest quarter, up from $1.66 year-over-year, while revenue grew to $96.45 billion. Analysts maintain a positive outlook with a median price target of $214.14 and project dividend growth from $0.600 to $0.662 per share next year.

Regulatory Headwinds Impact Strategy

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The EU's accusations center on Google allegedly prohibiting app developers from informing users about cheaper offerings outside the Play Store and favoring its own services in search results. These allegations could result in penalties up to 10% of Alphabet's global annual revenue, adding to over 8 billion euros in previous EU fines. The timing is particularly sensitive as trade tensions between the EU and US intensify, with President Trump threatening tariffs against countries that penalize American companies. These regulatory challenges emerge as Alphabet increases focus on artificial intelligence and autonomous technologies, with its Waymo subsidiary now operating in four major US cities and conducting approximately 150,000 rides weekly.