What We Learned This Week

Legal Win for Google: Google notched a major win this week as a judge ruled it would not have to divest its Chrome browser. This follows last year’s landmark antitrust case, where the company was found to hold an illegal monopoly in internet search. The uncertainty surrounding that ruling has weighed on the stock, which jumped nearly 8% on the news. It’s hard to overstate how critical Chrome is to Google’s story. When it launched in 2008, Internet Explorer still controlled more than 70% of the browser market. Google knew that relying on Microsoft’s product left its future vulnerable. This became especially clear once Microsoft launched its own search engine, Bing, a year later. Chrome’s slick design and faster performance quickly won users, reshaping the internet and cementing Google’s independence. Without it, Microsoft could have steered search traffic toward its own engine by default, a move that might have fundamentally altered Google’s trajectory.

The ruling does impose limits on Google’s ability to strike exclusive default-placement deals with partners, a practice that’s been at the center of its Apple relationship, where Google pays billions annually to remain the default search on iPhones. With exclusivity off the table, other players may now compete for those slots. Still, the key takeaway is that Google avoided the harshest penalty from its antitrust loss. For investors, this removes a significant overhang and provides more clarity on the company’s future, even if the broader regulatory environment will remain a watchpoint.

Prime Cracking Down on Password Sharing: Amazon is the latest to crack down on password sharing. Starting in October, Prime members will no longer be able to share access with individuals living at different addresses. Those users will be prompted to create their own Prime accounts if they want to keep using the service. The move comes after Amazon reportedly fell short of its internal subscription growth targets heading into Prime Day, despite already strong overall usage - suggesting a rise in account sharing.

This puts Amazon in line with other subscription platforms following Netflix’s lead. What once seemed like a risky bet (angering users and driving cancellations) turned out to be a growth catalyst for Netflix, with subscriber numbers climbing sharply as freeloaders converted into paying customers. The bet is that Prime can follow a similar path. While the change will ruffle some feathers, the logic is straightforward: Amazon believes Prime provides enough value that most users won’t leave, and with millions of shared accounts still untapped, there’s meaningful revenue sitting on the table.

Good Jeans: American Eagle Outfitters delivered a surprise this week, reporting results that blew past expectations and sent the stock soaring nearly 25%. The strength was notable given the recent controversy surrounding its advertising campaign with actress Sydney Sweeney. The campaign was widely panned on social media and in the press, with critics accusing it of pushing problematic messaging and influencers calling for boycotts.

But according to the company, the campaign was actually its most successful ever, underscoring the gap that can exist between media noise and consumer reality. It’s a reminder that the loudest voices don’t always represent the majority view - something we often see in politics but that applies just as easily to business. For investors, it’s a useful case study: don’t let surface-level backlash or headline sentiment alone dictate decisions. Dig deeper, question the narrative, and focus on actual performance.