The U.S. Supreme Court on Monday ruled in Alphabet’s (GOOGL) favor in a copyright dispute with Oracle (ORCL) involving Android software, in a decision that could have broader implications for technology developers. Google stock climbed into a buy zone.
The Supreme Court ruled 6 to 2 in Google’s favor in the long-running case. Android-based mobile phones are used worldwide.
Google argued that Sun Microsystems, the developer of Java software that was acquired by Oracle in 2010, had no problems with Google developing its Android mobile operating system using Java APIs, or application program interfaces.
In its ruling, the Supreme Court said Google’s copying of the API constituted a “fair use of that material.” Google used the API to let Java programmers build Android apps.
Silicon Valley’s software industry cheered the ruling. Tech industry groups said Oracle’s copyright infringement claim threatened to undercut widely used practices involved in creating many kinds of software.
“After more than a decade of litigation this ruling is a win for interoperability, copyright principles and the future of innovation,” Matt Schruers, president of the Computer and Communications Industry Association, said in a press release. “The high court’s decision that fair use extends to the functional principles of computer code means companies can offer competing, interoperable products.”
Google Stock: Waymo CEO Departs
Alphabet faced the prospect of paying Oracle nearly $9 billion in damages and possible royalties.
Google stock popped 4.2% to 2,218.96, an all-time closing high, on the stock market today.
From a weekly chart perspective, GOOGL stock had forged a flat base. That provided a new entry point of 2,145.24.
With the gain, GOOGL stock moved into a 5% buy zone that extends to 2,252.50, according to IBD MarketSmith analysis.
In addition, investors shrugged off the surprise exit of Waymo Chief Executive John Krafcik on Monday
Alphabet on Friday said Krafcik, head of the autonomous vehicle unit since 2015, would be replaced by two co-CEOs — Tekedra Mawakana and Dmitri Dolgov. Mawakana had been Waymo’s chief operating officer while Dolgov was Waymo’s chief technology officer.
Meanwhile, Google’s Relative Strength Rating is only 68 out of a possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS rating of 80 or better.
Waymo Valuation Is Key Question
A key question for GOOGL stock investors has been the valuation of self-driving-car project Waymo and other bets such as Google’s Verily Life Sciences unit.
In early 2018, some analysts projected Waymo’s long-term valuation in a range of $75 billion to $125 billion. Expectations for autonomous vehicles, though, have been lowered.
In March 2020, Waymo raised $2.25 billion in funding from outside investors including private equity firm Silver Lake, the Canada Pension Plan Investment Board and Abu Dhabi’s Mubadala investment arm.
While Google did not disclose Waymo’s valuation in the funding round, reports said it was only $30 billion at the time.
In addition, Google stock owns an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
