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.

The Justice Department is looking to break up one of America’s most powerful companies following a court ruling in September that found Google violated antitrust law. Shares of Google-parent Alphabet plunged over 5% Thursday after prosecutors outlined proposed remedies that would significantly alter how the search giant conducts its business.