Alphabet, Google's parent company, saw its stock price soar 6% in pre-market trading on Wednesday after a US federal judge rejected demands to force the company to break up in an antitrust case. This ruling marks a critical turning point for the tech giant that has long faced regulatory scrutiny for its dominance in search and mobile ecosystems.

The ruling by Judge Amit Mehta allows Google to retain control over its Chrome browser and Android mobile operating system, but prohibits certain exclusive contracts with device manufacturers and browser developers. Google can continue paying partners like Apple to make its search engine the default option - a practice that is central to Google's strategy for maintaining dominance in online search.

Apple's pre-market stock price rose 2.6%.

Analysts at MoffettNathanson described the outcome as "a big win for maintaining the status quo," adding that "facing such mild penalties despite being found to have engaged in monopolistic behavior is particularly favorable for this tech company."

Analysts noted that the ruling allows Alphabet to continue deepening its partnership with Apple and potentially integrate its Gemini artificial intelligence (AI) technology into future iPhone models.

The ruling eliminates a key regulatory overhang that has long impacted Alphabet's valuation. Analysts stated that the company's stock had previously traded at a discount relative to peers due to market concerns about potential forced breakup.

Alphabet's stock has gained nearly 11.7% year-to-date, outperforming Amazon but lagging behind Meta and Microsoft.

The US government filed a lawsuit against Google in 2020, alleging that it illegally maintained its search monopoly through exclusive agreements with device manufacturers and browser developers.

Judge Mehta ruled last year that Google violated antitrust laws but refused to order a forced breakup, citing the emergence of AI tools like ChatGPT as new forms of competition.