Google-parent Alphabet is facing pressure on two fronts—the government and a host of new AI-powered search rivals. It has the capacity to meet both challenges and its stock can continue to prosper.

Shares of online advertising giant Alphabet (NASDAQ:GOOGL) fell 6.5% in the morning session after the Department of Justice proposed changes to limit Google's control over online search and ads, following a court ruling that found the company (GOOGL) unfairly blocked competition for over a decade.

In September, U.S. District Judge Amit Mehta ruled Google had illegally monopolized the search market with tens of billions of dollars in payments to ensure it remained the default search engine on smartphones and web browsers.