It’s been a fun week for tech CEOs defending their multi-billion-dollar empires in court (as if they’re selling nuclear weapons on the black market). First up…  Mark Zuckerberg, who returned to court to explain (again) why buying anything that breathes near Meta’s business model is in fact, not a monopoly. “Just strategic dominance bro, I mean your Honor.”

And now, just days later, Google’s getting its turn in the hot seat… with a federal judge pretty much saying, “Yeah… this whole ad business is probably illegal.”

Yesterday, U.S. District Judge Leonie Brinkema ruled that Google has been illegally monopolizing two key pieces of the online advertising supply chain: the publisher ad server and the ad exchange. I know all of this is kinda confusing but In normal-people terms… Google owns both the auction house and the paddles, and then charges a fee for using either.

This ruling comes after a trial that dragged on for months, involved nearly 60 witnesses, and had more receipts than a Walgreens checkout. The court ultimately said Google’s acquisitions of companies like DoubleClick and Admeld helped it lock up the market… making it harder for anyone else to compete. Brinkema made it clear she believes Google’s behavior “substantially harmed” publishers and users alike.

The Department of Justice wants Google to be forced to sell off its ad-tech business… specifically Google Ad Manager, which would be a major blow. You know, considering ads are kind of their whole thing.

Let’s do some back-of-the-napkin math. Last quarter alone, Alphabet made $24.8 billion in free cash flow on $96.5 billion in revenue. That’s a 25.75% margin. (If that doesn’t impress you, just know that most Fortune 500 companies would sell their CFO’s left kidney for margins like that.) So when a judge threatens to take nearly a half a billion in revenue per year away, it’s kinda like telling Amazon they can’t use Prime anymore.

While all this unfolds, let’s not forget Google is still locked in another antitrust case about its search monopoly. That case is focused on private handshake deals (like the $15 billion+ Google reportedly pays Apple each year) to stay the default search engine on iPhones.

That trial’s remedies phase starts next week. So yeah, Google’s legal team is currently more active than its R&D department. (And honestly, it’s unclear which group will cost them more.) Oh, and earnings are coming up too. So, perfect timing. And if you look at the tea leaves, traders are telling us in all CAPS what they think is about to happen.

More than 8 million put options were bought this week at the $120 strike price. For reference, Alphabet closed at $153 yesterday, which means someone is betting it could fall more than 23% in the next couple of weeks. Of course, that’s not likely… but it’s something to keep an eye on.

To be fair, those puts only cost around 44 cents apiece… so this could be more of a hedge than a panic move. But the sheer volume of it is loud. It’s a signal that some investors are at least thinking about what a major breakup of Google’s ad empire would look like.

Is Google still a stock you should consider “buying the fear?” Depends who you ask. On paper, Alphabet still looks undervalued. Some analysts estimate the company’s worth anywhere from $214 to $256 per share, assuming it maintains its current free cash flow levels and the DOJ doesn’t smash it into ad-tech Legos.

But that “assuming” is doing a lot of heavy lifting. Because if the courts do force a breakup, or if ad revenue starts leaking to competitors like Amazon or Trade Desk (both of which popped on the news), that upside could evaporate fast.

Look, I’m usually the guy who thinks Big Tech always wins in the end. They’ve got the lawyers, the lobbyists, and the war chest to outlast just about anything. But even I have to admit… when Wall Street’s hedging this hard, it might be time to stop and ask what happens if, just this once, the DOJ actually swings the hammer.

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Stock.News has positions in Meta, Google, Apple, and Amazon.