Alphabet Stock Falls as Apple Signals Shift Toward AI Search Alternatives
Alphabet stock plunged 7.3% on Wednesday following reports that Apple may shift away from Google as its default search provider, signaling a rising threat from AI-powered tools.
In testimony during Google’s antitrust trial, Apple’s senior vice president of services, Eddy Cue, revealed that search queries in Safari have declined for the first time, as users increasingly turn to AI alternatives like ChatGPT and Perplexity AI.
Cue stated that Apple is in talks with new partners, including Perplexity, Anthropic (Claude), and OpenAI, to explore integrating AI-powered search into Safari. The move could jeopardize Google's estimated $20 billion annual deal with Apple to remain Safari's default search engine—a critical driver of Google's mobile search traffic and ad revenue.
The Justice Department’s lawsuit highlights growing concerns around Google’s search monopoly. In August 2024, a judge ruled that Google is a monopolist in general search services and advertising. The situation has been further amplified by Alphabet’s own 10-K filing, where it warned that AI competitors could surpass its technology.
Analyst Ben Reitzes of Melius Research, who rates Alphabet a Hold with a $166 price target, commented: “Today could be a historic turning point in Alphabet sentiment,” citing the shift in user behavior toward AI-based search platforms.
As the tech world redefines search, investor sentiment is shifting, raising questions about Google’s long-term dominance in a market it once owned.
Alphabet stock plunged 7.3% on Wednesday following reports that Apple may shift away from Google as its default search provider, signaling a rising threat from AI-powered tools.
In testimony during Google’s antitrust trial, Apple’s senior vice president of services, Eddy Cue, revealed that search queries in Safari have declined for the first time, as users increasingly turn to AI alternatives like ChatGPT and Perplexity AI.
Cue stated that Apple is in talks with new partners, including Perplexity, Anthropic (Claude), and OpenAI, to explore integrating AI-powered search into Safari. The move could jeopardize Google's estimated $20 billion annual deal with Apple to remain Safari's default search engine—a critical driver of Google's mobile search traffic and ad revenue.
The Justice Department’s lawsuit highlights growing concerns around Google’s search monopoly. In August 2024, a judge ruled that Google is a monopolist in general search services and advertising. The situation has been further amplified by Alphabet’s own 10-K filing, where it warned that AI competitors could surpass its technology.
Analyst Ben Reitzes of Melius Research, who rates Alphabet a Hold with a $166 price target, commented: “Today could be a historic turning point in Alphabet sentiment,” citing the shift in user behavior toward AI-based search platforms.
As the tech world redefines search, investor sentiment is shifting, raising questions about Google’s long-term dominance in a market it once owned.