Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) investors have had a lot to digest in recent months. In August, U.S. District Judge Amit Mehta found that Google illegally exploited its search dominance to stifle competition and stifle innovation and ultimately engaged in monopolistic competition, thereby violating antitrust law.

In a court filing this week, the U.S. Department of Justice (DOJ) offered the judge a list of potential remedies, the most egregious being dissolution of the company.

The potential implications have some investors asking the essential investing question: Is Alphabet stock a buy?

Image source: Getty Images.

A wide range of potential outcomes

To be clear, DOJ officials are considering a number of solutions to address Google’s dominance in search, and many of them are much less severe:

• A split of Alphabet into several smaller companies

• Force Google to share the data behind its search results

• Restrictions on how it pulls data from other sites to power its search algorithms

• Prevent the company from paying its competitors, in particular Apple — to be their default search engine.

• Prevent Google from using its Android, Chrome, Play and other products to power its search engine.

The judge will have the final say and may choose one of the recommendations proposed by the DOJ or a combination of remedies.

Google didn’t take the news quietly, publishing a blog post asserting that “the DOJ’s sweeping and sweeping proposals risk harming consumers, businesses, and developers.” The company went on to say that the DOJ’s proposals “went far beyond the legal issues specific to this case.” Google plans to “respond in detail” to these proposals.

That said, Alphabet is unlikely to be broken up.

Here’s why a breakup is unlikely

Investors concerned about a breakup need only look to history to understand how rare such a drastic step is. After Microsoft was found guilty of monopoly in 2000, the court sought to divide the company into two parts. However, the verdict was partially overturned on appeal. Microsoft ultimately agreed with the Justice Department to change some of its offending business practices.

While the dissolution of monopolies was commonplace in the early 20th century, decades have passed since the most recent example. In the early 1970s, AT&T controlled the vast majority of the national telephone system in the United States at a time when cell phones were still in the planning stages, providing communications services to 90% of the nation’s households. The DOJ filed an antitrust lawsuit in 1974, and after a court battle that lasted eight years, AT&T agreed to divide its operations into seven regional telephone systems.

This helps illustrate how rare these breakups are and why they are unlikely to occur at this time.

What this means for investors

To be clear, a decision on the matter will not be made anytime soon. The judge set a date of April 2025 to hear the motions for relief and does not expect to issue a decision until August. Even then, the court case likely won’t be over, since Google has already announced its intention to appeal the verdict, although it can’t even appeal until the judge issues his decision. Additionally, the appeals process is expected to last up to five years, so this case is far from over.

So what does this mean for investors? Until there is a final the outcome of the case — which is likely still years away — it will be business as usual. Google remains the undisputed leader in search, with 90% of the market. This fuels the company’s industry-leading digital advertising, which controlled 27% of the market last year. Then there is Google Cloud, the third largest cloud infrastructure provider among the “big three”, with 10% of this market. Artificial intelligence (AI) also represents a significant and growing opportunity for the business.

A breakup is unlikely, but if it do happens, it could benefit shareholders. There are aspects of Alphabet’s business that analysts generally don’t try to evaluate, including YouTube and Waymo. If its disparate businesses are valued separately, the company could actually be worth more than many think. In an interview with CNBC Fast moneyveteran technology analyst Gene Munster of Deepwater Asset Management suggests a breakup could unlock value in the company between 15% and 20%. Additionally, in the event of a divestiture, existing shareholders would ultimately own shares in the resulting companies.

Finally, the uncertainty resulting from the verdict worries some Alphabet investors. As a result, the stock is down 15% from its recent high, presenting an interesting opportunity. Alphabet stock currently sells for just 23 times earnings, a significant discount to a market multiple of 30. S&P500. This is also a reduction from Alphabet’s average price-to-earnings ratio of 30 over the past decade.

That’s a long way of saying ignore the noise and buy Alphabet stock.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Danny Vena holds positions at Alphabet, Apple and Microsoft. The Motley Fool holds positions and recommends Alphabet, Apple and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.