Perplexity wants to buy Google Chrome. Here's why Wall Street doubts it will happen.

Perplexity AI has reportedly bid $34.5 billion for Google Chrome amidst the looming antitrust ruling against Google, where a browser divestiture is a proposed remedy. Wall Street analysts, however, largely dismiss the offer as a publicity stunt or an attempt to influence the DOJ, citing the bid's extreme lowball valuation against Chrome's estimated $100 billion and Google's unlikelihood to sell. Firms like Baird and Raymond James assign low odds to a Chrome spinoff, anticipating less severe antitrust remedies, which they believe will result in manageable headwinds for Google and potentially a positive re-rating for Alphabet's stock.

Analysis

Perplexity AI's reported $34.5 billion bid for Google's Chrome browser is viewed by Wall Street as a strategic maneuver rather than a viable acquisition. Analysts at Baird characterize the offer as an "extreme lowball," valuing Chrome at approximately $100 billion, and suggest the bid is a tactic to influence the pending remedy decision in the DOJ's antitrust case against Google. The probability of a forced Chrome divestiture is considered low, with Baird assigning it a 20% chance. Both Baird and Raymond James anticipate less severe remedies, such as the prohibition of exclusive search agreements and data sharing requirements, which would represent manageable headwinds for Alphabet. This perspective underpins a positive outlook on Alphabet's stock, with analysts suggesting that a resolution to the antitrust uncertainty could lead to a positive re-rating. Raymond James notes that Judge Amit Mehta appears inclined to limit damage to the ecosystem, reinforcing the view that the legal proceedings are not a primary concern for the stock's fundamental value and that Alphabet's narrative is favorably shifting from an "AI laggard to AI leader."

Key Decisions for Investors

• Investors should largely discount the Perplexity bid as a non-credible publicity event and instead focus on the forthcoming DOJ remedy decision as the key catalyst for Alphabet's stock.
• Given that analysts from Baird and Raymond James forecast manageable, non-divestiture remedies, the resolution of this legal overhang could support the bullish case for GOOGL, potentially triggering a positive re-rating.
• While a forced sale of Chrome is considered a low-probability event, it remains a significant tail risk that should be monitored, as it would materially impact Google's competitive position and financial outlook.