Google leads monster week for tech, pushing megacaps to combined $21 trillion in market cap

From the courtroom to the boardroom, it was a large week for tech investors.

The resolution of Google's antitrust lawsuit led to crisp rallies for Alphabet and Apple. Broadcom shareholders cheered a caller $10 cardinal customer. And Tesla's banal was buoyed by a freshly projected wage bundle for CEO Elon Musk.

Add it up, and the U.S. tech industry's 8 trillion-dollar companies gained a combined $420 cardinal successful marketplace headdress this week, lifting their full worth to $21 trillion, contempt a descent successful Nvidia shares.

Those companies present relationship for astir 36% of the S&P 500, a proportionality truthful large by humanities standards that Howard Silverblatt, elder scale expert astatine S&P Dow Jones Indices, told CNBC by email, "there are nary comparisons."

There was a definite irony to this week's gains.

Alphabet's 9% leap connected Wednesday was straight tied to the U.S. authorities effort to diminish the hunt giant's marketplace control, which was portion of a years-long run to interruption up Big Tech. Since 2020, Google, Apple, Amazon and Meta person each been deed with antitrust allegations by the Department of Justice oregon Federal Trade Commission.

A twelvemonth ago, Google lost to the DOJ, a effect viewed by galore arsenic the most-significant antitrust determination for the tech manufacture since the lawsuit against Microsoft much than 2 decades earlier. But successful the remedies ruling this week, U.S. District Judge Amit Mehta said Google won't beryllium forced to merchantability its Chrome browser contempt its nonaccomplishment successful tribunal and alternatively handed down a much constricted punishment, including a request to stock hunt information with competitors.

The determination lifted Apple on with Alphabet, due to the fact that the companies tin instrumentality with an statement that involves Google paying Apple billions of dollars per twelvemonth to beryllium the default hunt motor connected iPhones. Alphabet roseate much than 10% for the week and Apple added 3.2%, helping boost the Nasdaq 1.1%.

Analysts astatine Wedbush Securities wrote successful a enactment aft the determination that the ruling "removed a immense overhang" connected Google's banal and a "black unreality worry" that hung implicit Apple. Further, they said it clears the way for the companies to prosecute a bigger artificial intelligence woody involving Gemini, Google's AI models.

"This present lays the groundwork for Apple to proceed its woody and yet apt treble down connected much AI related partnerships with Google Gemini down the road," the analysts wrote.

Mehta explained that a major factor successful his determination was the emergence of generative AI, which has go a overmuch much competitory marketplace than accepted hunt and has dramatically changed the marketplace dynamics.

New players similar OpenAI, Anthropic and Perplexity person altered Google's dominance, Mehta said, noting that generative AI technologies "may yet beryllium to beryllium crippled changers."

On Friday, Alphabet investors shrugged disconnected a abstracted antitrust substance retired of Europe. The institution was deed with a 2.95-billion-euro ($3.45 billion) fine from European Union regulators for anti-competitive practices successful its advertizing exertion business.

While OpenAI was an indirect catalyst for Google and Apple this week, it was much straight tied to the huge rally successful Broadcom's stock.

Following Broadcom's better-than-expected earnings report connected Thursday, CEO Hock Tan told analysts that his chipmaker had secured a $10 cardinal declaration with a caller customer, which would beryllium the company's 4th ample AI client.

Several analysts said the caller lawsuit is OpenAI, and the Financial Times reported connected a concern betwixt the 2 companies.

Broadcom is the newest entrant into the trillion-dollar club, acknowledgment to the company's customized chips for AI, already utilized by Google, Meta and TikTok genitor ByteDance. With Its 13% leap this week, the banal is present up 120% successful the past year, lifting Broadcom's marketplace headdress to astir $1.6 trillion.

"The institution is firing connected each cylinders with wide enactment of show for maturation supported by important backlog," analysts astatine Barclays wrote successful a note, maintaining their bargain proposal and lifting their terms people connected the stock.

For the different elephantine AI chipmaker, the past week wasn't truthful good.

Nvidia shares fell much than 4% successful the holiday-shortened week, the worst show among the megacaps. There was nary evident antagonistic quality for Nvidia, but the banal has present dropped for 4 consecutive weeks.

Still, Nvidia remains the largest institution by marketplace cap, valued astatine implicit $4 trillion, with its banal up 56% successful the past 12 months.

Microsoft besides fell this week and is connected an extended slide, dropping for 5 consecutive weeks. Shares are inactive up 21% implicit the past 12 months.

On the flipside, Tesla has been the laggard successful the group. Shares of the electrical conveyance shaper are down 13% this twelvemonth owed to a multi-quarter income slump that reflects rising contention from lower-cost Chinese manufacturers and an aging lineup of EVs.

But Tesla shares climbed 5% this week, sparked mostly by gains connected Friday aft the institution said it wants investors to o.k. a pay plan for Musk that could beryllium worthy up to astir $1 trillion.

The payouts, divided into 12 tranches, would necessitate Tesla to spot important worth appreciation, starting with the archetypal grant that won't footwear successful until the institution astir doubles its marketplace headdress to $2 trillion.

Tesla Chairwoman Robyn Denholm told CNBC's Andrew Ross Sorkin the program was designed to support Musk, the world's richest person, "motivated and focused connected delivering for the company."

WATCH: Tesla committee seat connected Elon Musk's wage plan