Understanding Alphabet's Potential in 2025: A Look at Risks and Opportunities

When it comes to investing, understanding why an investment may fail is just as critical as knowing why it could succeed. This is important for investors looking at a company like Alphabet (GOOG) (GOOGL), which is sending mixed signals to its potential investors.

On one side, Alphabet's advertising business remains stable, its cloud computing and artificial intelligence (AI) sectors are thriving, and its stock is currently priced attractively. On the flip side, the Department of Justice (DOJ) is pursuing legal actions against Alphabet, alleging that it holds an illegal monopoly, which may lead to significant challenges ahead. So, which elements should worry investors, and which should inspire confidence?

Red Flag: Investigations by the Department of Justice

The Department of Justice has been closely scrutinizing Alphabet for some time, and it seems to have taken decisive action. A judge has ruled that Google, a subsidiary of Alphabet, has engaged in monopolistic practices, which has led the DOJ to advocate for the sale of the Google Chrome browser. Although the judge has yet to finalize a decision, the implications of this ruling could linger for years.

Importantly, Alphabet has the option to appeal to the Supreme Court, a process that can also take considerable time. Consequently, this case could be a protracted matter, causing uncertainty and anxiety for investors. However, Alphabet might be devising strategies for future operations, should it ultimately lose access to the Google Chrome browser.

A historical context can help investors understand the potential timeline involved. For instance, Microsoft's antitrust case from the early 2000s showcases how long these legal disputes can stretch. Microsoft faced a ruling of illegal monopoly in April 2000, but various appeals and settlements delayed any resolution until mid-2004.

Given this context, Alphabet still has significant time ahead before the resolution of this case surfaces. Therefore, while it is a concerning issue, it may not warrant an immediate exit from investments in Alphabet.

At this stage, one could argue that this