Barclays analyst Ross Sandler said that following Friday's closing arguments, the probability of a Chrome divestiture, while low, has increased.

Alphabet, Inc. (GOOGL) (GOOG) shares came under selling pressure on Monday, underperforming the broader market and the tech sector, amid concerns about the ramifications of the online search monopoly case.

According to a Yahoo Finance report, an analyst at Barclays said the Google parent’s shares could drop 15% to 25% if District of Columbia district court judge Amit Mehta rules that the company should divest its Chrome browser.

Barclays analyst Ross Sandler said that following Friday's closing arguments, the probability of a Chrome divestiture, “while low, has increased in our view.” 

“The reality is we don't know what the court is going to decide on remedies, we listened to the entire day of closing arguments and there were certainly times where we felt a lot worse than we did prior, and other times where we felt better,” he added.

The analyst expects well-funded artificial intelligence (AI) companies like OpenAI, Anthropic, or Perplexity to buy Chrome in the event of a divestiture.

The analyst called such an outcome a “major blow” to Alphabet’s fundamentals, as Chrome accounted for 35% of Google’s search revenue. He added that he expects a 30% hit to the bottom line.

Sandler said, “This would be a major development, a black swan event for GOOGL shares.”

“Shares would obviously trade off significantly if this were to play out as no investors we speak to are thinking this remedy plays out.”

Following Friday’s closing arguments, Google said, “We still strongly believe the Court’s original decision was wrong, and look forward to our eventual appeal,” referring to Judge Mehta’s August 2024 ruling that found the company’s search business violated antitrust laws.

On Stocktwits, retail sentiment toward Alphabet stock was ‘bearish’ (36/100), with the message volume at ‘low’ levels.

GOOGL sentiment and message volume as of 1:49 a.m. ET, June 3 | source: Stocktwits

Retail investors' pessimism toward the stock was mainly due to their perceptions that the stock valuation was still unattractive and fears of a market crash due to the tariff uncertainty.

Alphabet stock is down over 10% year-to-date. The Koyfin-compiled average analysts’ price target for the stock is $201.47, implying about a 20% upside from its Monday close.

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