Google's Black Swan Event and a 25% Loss: ETFs to Consider

Core Viewpoint - Alphabet's shares have experienced significant volatility in 2025, reflecting broader market trends, with a notable 37% increase in 2024 followed by an 8.9% rise in early 2025, before a sharp decline of around 30% in February due to escalating trade tensions [1][2]. Company Performance - By April 2025, Alphabet's shares rebounded, gaining 17% as of June 2, following easing trade tensions, and the company holds a Zacks Rank 3 (Hold) with a strong Growth Score of A [2]. - The company faces uncertainty due to ongoing antitrust legal proceedings, with the Department of Justice concluding arguments that could have significant implications for Alphabet [3][4]. Legal Challenges - Alphabet lost a landmark antitrust case in August 2024, with a ruling that it illegally monopolized the search engine market, leading to potential drastic consequences for the company [4]. - Analysts predict that if a divestiture of the Chrome browser is ordered, Alphabet's shares could drop by 15% to 25%, and its earnings per share (EPS) could decrease by up to 30% due to Chrome's substantial user base of 4 billion and its contribution of 35% to Alphabet's search revenues [4][5]. Settlement and Compliance - Alphabet has agreed to a $500 million settlement to change its compliance structure as part of a resolution to a shareholder lawsuit alleging antitrust violations, with additional legal fees potentially reaching $80 million [7]. Investment Opportunities - The legal developments surrounding Alphabet are expected to create short-term volatility in its shares, prompting interest in ETFs with significant exposure to the company [8]. - Several ETFs with notable exposure to Alphabet include: - IShares Global Comm Services ETF with 11.97% exposure and an asset base of $415.5 million [9]. - Fidelity MSCI Communication Services Index ETF with 12.50% exposure and an asset base of $1.49 billion [11]. - Vanguard Communication Services ETF with 12.49% exposure and an asset base of $4.74 billion [12]. - MicroSectors FANG+ ETN with 9.74% exposure and an asset base of $445.9 million [13]. - Communication Services Select Sector SPDR Fund with 8.71% exposure and an asset base of $21.82 billion [14].