In 2020, Alphabet's (GOOGL) Google realized it had a big problem... For years, folks complained about how the Internet search giant tracks its users. These critics didn't like how much data Google collects about us.
Google's 'Storm Clouds' Could Be Clearing
By Marc Chaikin, founder, Chaikin Analytics
In 2020, Alphabet's (GOOGL) Google realized it had a big problem...
For years, folks complained about how the Internet search giant tracks its users. These critics didn't like how much data Google collects about us.
Then, in June 2020, Google became the target of a $5 billion class-action lawsuit.
The lawsuit accused the company of secretly tracking users while their Internet browsers were set to "incognito" mode.
With this feature, Google isn't supposed to save your activity. It's a way to browse the Internet more privately.
The scariest part was the man behind the lawsuit – David Boies.
You've probably never heard of Boies. But every major corporation in America knows him...
Boies is one of the most feared lawyers in the country.
For example, in 1998, the U.S. government hired Boies as the lead attorney for its antitrust suit against tech giant Microsoft (MSFT).
In a videotaped deposition, Boies crushed Microsoft co-founder Bill Gates. His questions completely flustered the world's richest man. At one point, it got so bad that Gates accused Boies of being "out to destroy Microsoft."
Microsoft lost that case. But after years of legal wrangling, the company avoided the need to break up.
More than 20 years later, Boies' next big target became Google.
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The U.S. Department of Justice ("DOJ") sued Google in October 2020. It accused the company of having a monopoly over the online search and advertising markets.
In short, Google found itself in the same position as Microsoft in the late 1990s.
It needed to square off in a courtroom with the U.S. government and Boies.
You probably heard about this story in the news. But if the details seem fuzzy, here's why...
These legal battles take years to play out. So the few developments are easy to miss.
Google agreed to settle the class-action lawsuit in December 2023. As part of the deal, it agreed to destroy billions of data records linked to folks who used incognito mode.
The court didn't award any of the $5 billion sought by the class-action lawsuit. (That's not surprising, though. It's difficult to prove that users suffered any monetary damages.)
The government's antitrust case is progressing a bit more slowly...
It took almost three years for the federal trial to start in September 2023.
Then, this past August, a judge found Google guilty of having monopoly power over search services and text ads. As the judge wrote in a ruling...
After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly.
The trial is still ongoing. In November, the DOJ said Google should need to sell its Chrome web browser – and possibly its Android mobile-operating system.
The court doesn't have to follow this advice during the next phase of the trial. That part is set to begin in April.
Regardless of the outcome, you can bet that Google's lawyers will appeal the decision. And it will likely take years before we hear a final ruling.
That's probably exactly what Google wants, too...
The company obviously survived the more restrictive regulatory environment of the Biden administration. And now, it can focus on cleaning up the damage during Donald Trump's more business-friendly term.
In other words, the "storm clouds" seem to be clearing over the tech giant. And when it comes to the stock of its parent company Alphabet, the Power Gauge agrees...
After spending most of the past six months stuck with a "neutral" rating, Alphabet flipped into "bullish" territory early last month. And its stock surged higher. Take a look...
Now, Alphabet holds a "very bullish" rating in the Power Gauge. Put simply, our system sees upside ahead for the stock.
This is a good sign for the company itself... and the broad market overall.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.93%
12
10
8
S&P 500
+0.55%
102
247
149
Nasdaq
+0.21%
33
47
20
Small Caps
+0.46%
411
1049
442
Bonds
-0.78%
Health Care
+1.34%
8
35
17
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bearish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Information Technology
+4.91%
Industrials
+3.46%
Communication
+3.07%
Discretionary
+2.38%
Health Care
+2.09%
Financial
+1.79%
Materials
+1.68%
Staples
+0.91%
Real Estate
+0.83%
Utilities
-0.05%
Energy
-1.12%
* * * *
Industry Focus
Retail Services
28
38
14
Over the past 6 months, the Retail subsector (XRT) has underperformed the S&P 500 by -4.68%. However, its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #6 of 21 subsectors.
Top Stocks
BBW
Build-A-Bear Worksho
GCO
Genesco Inc.
ACI
Albertsons Companies
* * * *
Top Movers
Gainers
MRNA
+10.1%
GE
+6.6%
ENPH
+5.41%
UNP
+5.2%
KMX
+4.75%
Losers
EA
-16.7%
LDOS
-7.57%
UAL
-4.6%
MU
-4.02%
WRB
-3.59%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
AXP, MMM
ADM, DHI, NEE, PGR, ROK
EW
FCX, SLB, VZ
No earnings reporting today.
Earnings Surprises
FCX Freeport-McMoRan Inc.
Q4
$0.31
Beat by $0.09
GE General Electric Company
Q4
$1.32
Beat by $0.28
NTRS Northern Trust Corporation
Q4
$2.26
Beat by $0.23
UNP Union Pacific Corporation
Q4
$2.98
Beat by $0.19
TXN Texas Instruments Incorporated
Q4
$1.30
Beat by $0.07
* * * *
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