Google's Search Dominance Challenged as Apple Explores AI Alternatives

Alphabet faces 'watershed moment' if AI erodes search dominance, analysts say

Wall Street's more bearish investors believe that Alphabet could be facing an uphill battle of disruption. Shares of Alphabet sank 7% on Wednesday after Eddy Cue, senior vice president of services at Apple, said Apple was "actively looking at" reshaping its Safari web browser to focus on search functions powered by artificial intelligence, according to a report by Bloomberg . GOOGL YTD mountain GOOGL YTD chart Cue's remarks came in testimony in the Justice Department's lawsuit against Apple. The executive added that he believes AI search engines such as OpenAI will eventually replace their historic counterparts, such as Google. In response, many analysts across Wall Street took a "wait-and-see" approach, with some saying the stock decline was overblown. On Thursday, Alphabet shares rebounded as much as 2.5%. More optimistic analysts pointed to Alphabet's own AI innovations, led by Gemini, a strong suite of products, the difference between search queries asked in AI versus traditional search questions and the Apple executive's own self-interest in his Wednesday remarks. But other researchers -- albeit a minority -- warned that cracks are showing in Alphabet's armor. Wells Fargo's Ken Gawrelski called this a "watershed moment," while Melius Research's Ben Reitzes begged Alphabet to "make a bet already and disrupt yourself before it's too late." Here's how some of Wall Street's more bearish analysts answered the Apple executive's remarks. Wells Fargo "View Apple's remarks indicating search volume declined for the first time in April as a watershed moment. Believe consumer behavior is changing and GOOGL must act to accelerate adoption of AI-powered search to maintain market leadership." Melius Research "The comments from Apple not only back our below consensus long-term estimates for Google Search -- but also back downside in 2025. It may be time for Alphabet to make a real bet -- instead of just experimenting all the time (Deep Research, Notebook LLM, AI mode, etc.), really confusing the heck out of people ... Self-inflicted business model disruptions in the tech elite aren't unheard of ... Alphabet -- make a bet already and disrupt yourself before it's too late." Citizens "While we acknowledge the value of Google's distribution as it has seven services with 2B+ MAU, the superior search product offered by ChatGPT is taking share of queries. Additionally, while the valuation is increasingly compelling and Google has substantial cost levers to maintain profitability growth if search faces headwinds, we continue to view search estimates as having downside risk, and maintain our Market Perform rating given our view that the risk/reward in shares is currently balanced." MoffettNathanson Research "While the market may have been waiting for a day like today where people's worst fears on search are confirmed, we hate to say that Google investors are out of the woods. Yes, the stock is cheap ... and yes, other divisions are growing nicely ... and yes, search may be more resilient than people think due to commercial search share and pricing power. Our experience covering other sectors that have been disrupted tell us that this is a long bumpy journey that ultimately becomes smoother when today's worries are long in a mirror of rear view. Unfortunately, we are just starting the ride." -- CNBC's Michael Bloom contributed to this report.

Alphabet's share price plunges on traffic drop testimony

Shares in Google parent Alphabet plunged more than 7% on Wednesday after an Apple executive told a federal court that the search engine's traffic fell on Apple products last month. Eddy Cue, Apple's senior vice president of services, testified at an antitrust trial in Washington that Google search volume was losing traffic to AI alternatives such as ChatGPT or Perplexity, according to US media reports. "That has never happened in 20 years," legal news outlet MLex quoted him as saying. Cue was giving testimony in a trial in which US Judge Amit Mehta will determine how Google must address his landmark ruling last year that it operates an illegal monopoly in online search. The Apple executive's remarks saw Google's market capitalization wiped of $140 billion since the close of trading on Wall Street on Tuesday. The marathon court case has revealed that Google pays Apple tens of billions of dollars every year in a revenue sharing agreement in which Google's search engine is set as the default on Apple's Safari browser. Markets were also rattled by Cue's comment that "over the coming year we will add other (AI) choices to the search engine choice in the browser, because I think those products are getting better and better," he said, according to MLex. The testimony backed Google's argument that the emergence of AI has begun a new era in how people get information online, with its search engine now facing new rivalry from AI chatbots. US government attorneys have urged Judge Mehta to force Google to sell off its Chrome browser, arguing that artificial intelligence will actually only ramp up the tech giant's online search dominance. Another option is that the judge, in a decision expected in August, will order an end to the payouts from Google to Apple and others for the default position on devices. Cue told the court this would have a significant impact on Apple's ability to invest in new products and services.

An Apple executive sparked a Google stock selloff. Don't panic, analyst says

Cue attributed the drop -- which Google parent Alphabet disputes -- to a growing user shift toward AI tools like ChatGPT, Perplexity, and Claude, and suggested Apple may eventually integrate one of them directly into Safari. Investors, already nervous about AI's disruption of search, didn't take the news lightly and wiped roughly $155 billion off Alphabet's market cap. Cue made the remarks while testifying during the Department of Justice's ongoing antitrust trial against Google. This trial centers on whether Google has maintained an illegal monopoly over search by paying billions to be the default engine on browsers like Safari. Cue appeared as a witness for the DOJ, and his comments about declining Safari search volume and potential AI alternatives were part of that testimony. But according to analysts at Jeffries, the selloff may be overblown. In a note released late Wednesday, titled "Don't Rush to Count Out Google Search," analysts from the investment bank argued that Safari's shrinking share is a limited threat. While Apple's browser holds 17% of global market share, Google Chrome commands 66%, giving Alphabet a much larger footprint regardless of what Apple does. Meanwhile, daily active users of the Google app on iOS have climbed 15% year over year, undercutting fears of a broader user exodus. Importantly, Google's search business remains strong: Revenue grew 10% in Q1, even with tough comps and rising competition. Google's AI Overviews -- a feature that condenses information for search results using generative AI -- are also monetized at roughly the same rate as traditional search, Jeffries noted, suggesting Alphabet is adapting its core product without sacrificing profitability. The analysts argued Google should be able to improve these economics over time, too. As to valuation, Alphabet now trades at just 9.7 times forward EBITDA, the analysts pointed out -- barely above its 10-year trough and well below long-term averages. The stock is down 20% so far this year, underperforming the Nasdaq's 6% decline. In short, while Apple may be exploring new partners, Google's search dominance is far from over. "We believe the market reaction is excessive," Jeffries conclued. "Reiterate Buy." While the memo represents just one group of analysts, Alphabet shares already look to be recovering. The stock was up more than 2% before Thursday's market open.

Google shares plunge after Apple executive's court testimony

Washington (AFP) - Shares in Google parent Alphabet plunged more than eight percent on Wednesday after Apple executive Eddy Cue testified in federal court that Google's search traffic on Apple devices declined last month for the first time in over two decades. Cue, Apple's senior vice president of services, told the Washington antitrust trial that Google was losing ground to AI alternatives like ChatGPT and Perplexity. His revelation that this decline "has never happened in 22 years" sent shockwaves through Wall Street, wiping more than $170 billion from Google's market capitalization in a single trading session. The testimony came during a pivotal trial where District Judge Amit Mehta will determine remedies for Google's previously ruled illegal search monopoly. The case, ongoing since 2020, has exposed Google's practice of paying Apple tens of billions dollars annually to remain the default search engine on Safari browsers and Apple smartphones. Investors were further unsettled when Cue suggested Apple might soon offer AI alternatives as default search options on its devices, heightening concerns that Google's advertising revenue could face serious threats from AI competitors. With the three-week trial set to conclude Friday, government attorneys are pushing Judge Mehta to order Google to divest its Chrome browser. They argue that AI technologies will only strengthen Google's dominance by leveraging its vast data resources across products like Maps, YouTube, and Chrome to stifle competition. However, Cue's testimony bolstered Google's defense that AI is already disrupting its search dominance, with chatbots now posing legitimate threats to its business model. 'Losing sleep' When Judge Mehta issues his ruling in August, he could end Google's default search agreements with Apple and others -- a prospect that Cue told the court he was "losing sleep" over, with potential revenue losses impacting Apple's product development and operating system investment. Alternatively, Mehta might order Google to share its search data with competitors, which CEO Sundar Pichai warned would effectively amount to a "de facto divestiture of search." As a counter offer, Google proposes a more limited remedy that would allow it to continue paying for default placement of its search engine, but with an annual renegotiations and greater freedom for smartphone manufacturers to choose which Google apps to install on their devices. The Google case represents just one of five major tech antitrust actions currently pursued by the US government, with Meta facing similar scrutiny in the same courthouse. Google recently lost a separate case regarding its ad technology business and may face additional divestitures, while Apple and Amazon are also expected to confront antitrust challenges in US courts.

Alphabet's share price plunges on traffic drop testimony

Washington (AFP) - Shares in Google parent Alphabet plunged more than seven percent on Wednesday after an Apple executive told a federal court that the search engine's traffic fell on Apple products last month. Eddy Cue, Apple's senior vice president of services, testified at an antitrust trial in Washington that Google search volume was losing traffic to AI alternatives such as ChatGPT or Perplexity, according to US media reports. "That has never happened in 20 years," legal news outlet MLex quoted him as saying. Cue was giving testimony in a trial in which US Judge Amit Mehta will determine how Google must address his landmark ruling last year that it operates an illegal monopoly in online search. The Apple executive's remarks saw Google's market capitalization wiped of $140 billion since the close of trading on Wall Street on Tuesday. The marathon court case has revealed that Google pays Apple tens of billions of dollars every year in a revenue sharing agreement in which Google's search engine is set as the default on Apple's Safari browser. Markets were also rattled by Cue's comment that "over the coming year we will add other (AI) choices to the search engine choice in the browser, because I think those products are getting better and better," he said, according to MLex. The testimony backed Google's argument that the emergence of AI has begun a new era in how people get information online, with its search engine now facing new rivalry from AI chatbots. US government attorneys have urged Judge Mehta to force Google to sell off its Chrome browser, arguing that artificial intelligence will actually only ramp up the tech giant's online search dominance. Another option is that the judge, in a decision expected in August, will order an end to the payouts from Google to Apple and others for the default position on devices. Cue told the court this would have a significant impact on Apple's ability to invest in new products and services.

Why Google Parent Alphabet's Stock Is Tumbling Wednesday

Kara Greenberg is a senior news editor for Investopedia, where she does work coordinating, writing, assigning, and publishing multiple daily and weekly newsletters. Prior to joining Investopedia, Kara was a researcher and editor at The Wire. Earlier in her career, she worked in financial compliance and due diligence at Loomis, Sayles & Company, and The Bank of New York Mellon. Shares of Google parent Alphabet (GOOGL) plunged Wednesday after an Apple (AAPL) executive reportedly said the iPhone maker is looking to add AI-powered search options to its Safari browser, and suggested they could eventually replace standard search engines like Google's. Shares of Alphabet were down 9% in recent trading. They've lost about a fifth of their value since the start of the year. Apple's senior vice president of services, Eddy Cue, said Wednesday during testimony in the U.S. Department of Justice's lawsuit against Alphabet that searches on Apple's Safari fell last month for the first time, and attributed the drop to rising AI use, Bloomberg reported. Cue said Apple has had discussions with Perplexity AI, as it looks to add AI search options to its Safari browser, with expectations their use could overtake standard search engines like Google's, the report said. Apple has reportedly held talks with Anthropic and ChatGPT maker OpenAI as well. Such a shift could also hit Apple's revenue -- something Cue said he's "lost a lot of sleep thinking about." Google pays an estimated $20 billion a year to make its search engine the default option on Safari, and Apple makes a cut of Google's ad revenue from searches through the browser. Shares of Apple slid about 2% in recent trading.

Why Analysts Are Staying Bullish on Google After Search Worries Sparked Sell-Off

Google parent Alphabet (GOOGL) lost about $150 billion in market capitalization Wednesday amid worries it could lose ground to AI-powered search options. Morgan Stanley says it's an opportunity to buy the stock. "GOOGL sentiment has (again) troughed due to AI-disruption fears," Morgan Stanley said, referencing an Apple (AAPL) executive's comments that the iPhone maker is looking to add AI-powered search options to its Safari browser, and suggested they could eventually replace Google, which is currently Safari's default search engine. However, Morgan Stanley argued that potential threats from AI search providers like OpenAI, Meta, and Perplexity "don't yet have large enough user bases or compelling enough products," to drive customers away from Google. Shares of Alphabet were up 2% close to $155 in recent trading Thursday, after plunging 7% a day earlier. Morgan Stanley maintained its price target of $185, and said it's "time to buy" the stock. Jefferies analysts noted that Chrome holds a 66% browser share compared to Safari's 17%. Google has also made its own progress in AI, with AI Overviews in Search reaching 1.5 billion monthly active users. "While we agree there are emerging alternatives to Google Search, GOOGL is not standing still," the analysts said. Jefferies reiterated its $200 target, calling yesterday's sell-off "overdone." JPMorgan and Citi affirmed their targets of $195 and $200, respectively. Still, one serious risk to Google's search dominance is antitrust enforcement. Last August, a federal judge agreed with Justice Department prosecutors that Google operated an illegal monopoly in the online search market. The Apple executive's comments were part of testimony in a court proceeding Wednesday meant to find a remedy to that monopoly.

Google-parent Alphabet stock price crashes, market cap wiped of whopping $140 billion

Alphabet share price fell on Wednesday as an Apple executive claimed that Google search volume was losing traffic to AI alternatives such as ChatGPT or Perplexity.Google parent Alphabet shares plunged more than seven per cent on Wednesday after an Apple executive told a federal court that the search engine's traffic fell on Apple products last month, as per a report. Eddy Cue, Apple's senior vice president of services, testified at an antitrust trial in Washington that Google search volume was losing traffic to AI alternatives such as ChatGPT or Perplexity, according to US media reports. "That has never happened in 20 years," legal news outlet MLex quoted him as saying. Cue was giving testimony in a trial in which US Judge Amit Mehta will determine how Google must address his landmark ruling last year that it operates an illegal monopoly in online search. The Apple executive's remarks saw Google's market capitalization wiped of $140 billion since the close of trading on Wall Street on Tuesday, AFP reported. The marathon court case has revealed that Google pays Apple tens of billions of dollars every year in a revenue sharing agreement in which Google's search engine is set as the default on Apple's Safari browser. Markets were also rattled by Cue's comment that "over the coming year we will add other (AI) choices to the search engine choice in the browser, because I think those products are getting better and better," he said, according to MLex. The testimony backed Google's argument that the emergence of AI has begun a new era in how people get information online, with its search engine now facing new rivalry from AI chatbots. US government attorneys have urged Judge Mehta to force Google to sell off its Chrome browser, arguing that artificial intelligence will actually only ramp up the tech giant's online search dominance. Another option is that the judge, in a decision expected in August, will order an end to the payouts from Google to Apple and others for the default position on devices. Cue told the court this would have a significant impact on Apple's ability to invest in new products and services. Q1. Which company owns Google? A1. Alphabet owns Google. Q2. What is full form of AI? A2. The full form of AI is Artificial Intelligence.

Alphabet's share price plunges on traffic drop testimony

Shares in Google parent Alphabet plunged more than seven percent on Wednesday after an Apple executive told a federal court that the search engine's traffic fell on Apple products last month. Cue told the court this would have a significant impact on Apple's ability to invest in new products and services. Shares in Google parent Alphabet plunged more than seven percent on Wednesday after an Apple executive told a federal court that the search engine's traffic fell on Apple products last month. Eddy Cue, Apple's senior vice president of services, testified at an antitrust trial in Washington that Google search volume was losing traffic to AI alternatives such as ChatGPT or Perplexity, according to US media reports. "That has never happened in 20 years," legal news outlet MLex quoted him as saying. Cue was giving testimony in a trial in which US Judge Amit Mehta will determine how Google must address his landmark ruling last year that it operates an illegal monopoly in online search. The Apple executive's remarks saw Google's market capitalization wiped of $140 billion since the close of trading on Wall Street on Tuesday. The marathon court case has revealed that Google pays Apple tens of billions of dollars every year in a revenue sharing agreement in which Google's search engine is set as the default on Apple's Safari browser. Markets were also rattled by Cue's comment that "over the coming year we will add other (AI) choices to the search engine choice in the browser, because I think those products are getting better and better," he said, according to MLex. The testimony backed Google's argument that the emergence of AI has begun a new era in how people get information online, with its search engine now facing new rivalry from AI chatbots. US government attorneys have urged Judge Mehta to force Google to sell off its Chrome browser, arguing that artificial intelligence will actually only ramp up the tech giant's online search dominance. Another option is that the judge, in a decision expected in August, will order an end to the payouts from Google to Apple and others for the default position on devices. Cue told the court this would have a significant impact on Apple's ability to invest in new products and services.

Apple, Alphabet Shares Tumble Amid Potential AI Search Shift - Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL)

Feel unsure about the market's next move? Copy trade alerts from Matt Maley -- a Wall Street veteran who consistently finds profits in volatile markets. Claim your 7-day free trial now. Apple Inc's AAPL stock dipped 2.1% to $194.35, while Alphabet Inc GOOGL GOOG shares plunged 5.7% to $153.95 on Wednesday, following reports that Apple may be rethinking its long-standing partnership with Google. What To Know: As reported by Bloomberg, Apple's senior vice president of services, Eddy Cue, testified in a U.S. antitrust trial on Wednesday that the company is "actively looking at" integrating an AI-powered search engine into Safari, its default web browser. Cue indicated Apple is evaluating alternatives like OpenAI, Anthropic and Perplexity AI, the companies behind popular AI tools like ChatGPT, Claude and Perplexity Assistant. He noted that Safari searches declined for the first time last month, citing AI tools as a key reason. Read Also: Oklo Stock Slides Following Tuesday's Surge: What's Going On? Though Cue said Google should remain Safari's default search engine for now -- especially given the estimated $20 billion annual revenue Apple receives from the deal -- he acknowledged that AI represents a major industry shift. The Apple executive believes emerging AI platforms could eventually outperform traditional search, adding that Apple has already begun talks with Perplexity. Alphabet investors responded sharply to the news, likely concerned about Google's long-term search dominance, which has faced increasing threats amid the emergence of AI tools. Read Also: All Eyes On Powell: What Betting Markets Expect Him To Say Wednesday According to data from Benzinga Pro: AAPL has a 52-week high of $260.09 and a 52-week low of $169.21. GOOGL has a 52-week high of $207.05 and a 52-week low of $140.53. AAPLApple Inc$194.49-2.03%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum54.35Growth46.03Quality82.33Value8.28Price TrendShortMediumLongOverviewGOOGAlphabet Inc$154.82-6.28%GOOGLAlphabet Inc$152.85-6.36%Market News and Data brought to you by Benzinga APIs

'AI Is Eating Search' Google Rival Perplexity CEO Arvind Srinivas Says As Dan Nile Predicts 'Agents' To Take Future Share Amid Alphabet, Apple Stock Fall - Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL)

Market giants Alphabet Inc. GOOGL GOOG and Apple Inc. AAPL saw their stocks tumble on Wednesday after reports suggested Apple may be reconsidering its lucrative search partnership with Google, with artificial intelligence emerging as the catalyst for potential industry disruption. What Happened: Apple's Senior Vice President of Services, Eddy Cue, testified in a U.S. antitrust trial that the company is "actively looking at" integrating an AI-powered search engine into Safari, evaluating alternatives from OpenAI, Anthropic and Perplexity AI. Cue revealed Safari searches declined for the first time last month, attributing the shift to growing AI tool adoption. Alphabet shares plunged 7.51% to $152.80 while Apple dipped 1.14% to $196.25. "AI is eating search," stated Perplexity AI CEO Aravind Srinivas on X, as his company positions itself as a contender in the evolving search landscape. Dan Niles, founder of Niles Investment Management, highlighted on X that the drop in Safari search activity aligns with Google's recent performance, where year-over-year growth in paid clicks slowed to 2% in the first quarter of 2025 -- down from 5% in the same period last year and 8% in early 2023, following the rise of ChatGPT in late 2022. Get StartedStart Futures Trading Fast -- with a $200 Bonus Join Plus500 today and get up to $200 to start trading real futures. Practice with free paper trading, then jump into live markets with lightning-fast execution, low commissions, and full regulatory protection. Get Started See Also: Disney's $30 Billion Theme Park Bet Pays Off As Bob Iger Touts 'All-Time High' Returns, Stock Rallies 10% After Q2 Earnings Why It Matters: A recent 9to5Mac comparison showed Perplexity "clearly outperformed or is at parity" with Apple's Siri and OpenAI's ChatGPT across most categories, according to Srinivas, emerging as the most versatile option by combining web-based intelligence with limited Apple app integration. Niles predicted that companies like "OpenAI, Anthropic, Perplexity, xAI" will continue taking market share from traditional search, with "AI agents" accelerating this trend. Despite these shifts, Cue indicated Google should remain Safari's default search engine for now, particularly given the estimated $20 billion in annual revenue Apple receives from the arrangement. Perplexity, backed by Jeff Bezos and NVIDIA Corp. NVDA, has gained momentum with recent Android launches and a SoftBank Corp. SFTBY partnership deploying 7,000 sales team members to drive enterprise adoption in Japan. Read Next: Shopify Gears Up For Q1 Print; Here Are The Recent Forecast Changes From Wall Street's Most Accurate Analysts Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. Image Via Shutterstock AAPLApple Inc$198.190.99%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum54.35Growth46.03Quality82.33Value8.28Price TrendShortMediumLongOverviewGOOGAlphabet Inc$154.951.41%GOOGLAlphabet Inc$153.581.45%NVDANVIDIA Corp$119.001.66%SFTBYSoftBank Group Corp--%Got Questions? AskWhich AI-driven search companies could thrive?How will Apple's search strategy impact its revenue?Which tech stocks might benefit from AI disruptions?Could Perplexity AI's growth affect Google?What potential does NVIDIA see in AI search?How might OpenAI leverage this search shift?Are AI search agents the future for investors?Which competitors are emerging in the AI space?What implications does this have for advertising revenue?How will Safari's search market evolve with AI?Powered ByMarket News and Data brought to you by Benzinga APIs

Google At Staggering 42% Discount To S&P 500 - Alphabet (NASDAQ:GOOGL)

Alphabet Inc GOOGL GOOG just clocked one of its worst trading days since 2023, shedding over 7% and nearly $150 billion in market cap. Apple Exec's Testimony Sends Google Stock Plummeting What caused the market to pull the plug? A courtroom mic-drop from Apple Inc's AAPL Eddy Cue, senior VP of Internet software and services. Cue's testimony at the Google Commercial Search antitrust trial sent shockwaves through the tech world. He revealed that Apple saw its first drop in search volume in two decades this April - and pointed the finger squarely at AI rivals like ChatGPT and Perplexity. More alarming, Apple has been chatting with both about becoming potential Safari search partners. That's like inviting your ex's nemesis to the prom. Read Also: 'AI Is Eating Search' Google Rival Perplexity CEO Arvind Srinivas Says As Dan Niles Predicts 'Agents' To Take Future Share Amid Alphabet, Apple Stock Fall Google Stock Sell-Off Overdone, Says Analyst Investors didn't take it lightly. Google's dominance in search suddenly looked a bit shakier, especially with paid click growth crawling at just 2% in Q1 - down from mid-single digits last year. But JPMorgan analyst Doug Anmuth thinks the sell-off was a bit much. In his words: "Overdone." Anmuth emphasized that Google is still the default on Safari and continues to see "overall query growth...including coming from Apple devices." He also notes that Apple's $20 billion revenue share from Google is too big to walk away from. While bears highlight a slowing growth story, bulls point to Google's fundamentals. YouTube's ad revenue climbed 14% in the fourth quarter of 2024 and Google Services' operating margin jumped to a strong 39%. Not to mention, AI Overviews now reaches 1.5 billion users monthly -- a stat worth bragging about as the I/O event looms on May 20. With Google stock trading at just 16.1x forward earnings, according to data from Benzinga Pro - 42% below the S&P 500's 27.65x - and Wall Street's top analysts pegging a 44.6% upside, there's a case to be made that this panic is more courtroom drama than structural decline. Read Next: Top 3 Health Care Stocks That Could Sink Your Portfolio In Q2 Google: Shutterstock GOOGLAlphabet Inc $154.271.91% Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full Score Edge Rankings Momentum 46.48 Growth 66.38 Quality - Value 51.90 Price Trend Short Medium Long Overview AAPLApple Inc $195.49-0.39% GOOGAlphabet Inc $155.551.80% Got Questions? Ask Which tech stocks could benefit from Google's dip? How might Apple's search strategy impact Google? Are AI search competitors set for a boost? Which advertising platforms could gain from Google's fall? Will investors find value in Google's low valuation? How could JPMorgan's analysis influence investor sentiment? Is there potential in Google's YouTube revenue growth? What implications does Antitrust trial have for tech stocks? Which emerging tech companies could fill the gap? How might Google's fundamentals attract new investors? Powered By Market News and Data brought to you by Benzinga APIs

Why Alphabet Stock Is Plummeting Today -- Could the Tech Giant's Search Fears Finally Be Coming True? | The Motley Fool

An Apple executive's legal testimony Wednesday is sending shock waves through the tech community. Bloomberg is reporting that Eddy Cue, Apple's senior vice president of services, testified Wednesday that Apple is "actively looking at" reshaping the Safari web browser on its devices to focus on artificial intelligence (AI)-powered search engines. The revelation came during Cue's testimony in the U.S. Justice Department's antitrust lawsuit against Alphabet -- Google's parent company -- which centers on the cornerstone deal that makes Google the default search engine in Apple's Safari browser. When ChatGPT-3 was released to the public in late 2022, investors immediately were concerned that the technology could prove a true threat to Google Search's near-stranglehold on how users search the web. The $20 billion deal that ensures Google is the default on Apple devices is a key aspect in maintaining its dominance. If Apple chooses to introduce AI-powered alternatives to Google on its devices, Google Search could lose a major chunk of its traffic, and therefore, value to advertisers. Cue also disclosed the particularly concerning detail that searches on Safari dipped for the first time ever last month, which he attributed to people using AI alternatives. This concrete data suggests the threat to Google's search monopoly may be materializing faster than many had anticipated. Google Search is responsible for more than half of Alphabet's total revenue. Losing its grip on internet searches would be very bad news for the company's bottom line. Still, as much as the testimony is concerning, the tech giant is supremely aware of the threat and is working to mitigate it. Alphabet's own AI offering is excellent, and I think it will ultimately weather this storm.

Google shares plunge after Apple executive's court testimony

Shares in Google parent Alphabet plunged more than eight per cent on Wednesday after Apple executive Eddy Cue testified in federal court that Google's search traffic on Apple devices declined last month for the first time in over two decades. Cue, Apple's senior vice president of services, told the Washington antitrust trial that Google was losing ground to AI alternatives like ChatGPT and Perplexity. His revelation that this decline "has never happened in 22 years" sent shockwaves through Wall Street, wiping more than US$170 billion from Google's market capitalization in a single trading session. The testimony came during a pivotal trial where District Judge Amit Mehta will determine remedies for Google's previously ruled illegal search monopoly. The case, ongoing since 2020, has exposed Google's practice of paying Apple tens of billions of dollars annually to remain the default search engine on Safari browsers and Apple smartphones. Investors were further unsettled when Cue suggested Apple might soon offer AI alternatives as default search options on its devices, heightening concerns that Google's advertising revenue could face serious threats from AI competitors. With the three-week trial set to conclude Friday, government attorneys are pushing Judge Mehta to order Google to divest its Chrome browser. They argue that AI technologies will only strengthen Google's dominance by leveraging its vast data resources across products like Maps, YouTube, and Chrome to stifle competition. However, Cue's testimony bolstered Google's defense that AI is already disrupting its search dominance, with chatbots now posing legitimate threats to its business model. When Judge Mehta issues his ruling in August, he could end Google's default search agreements with Apple and others -- a prospect that Cue told the court he was "losing sleep" over, with potential revenue losses impacting Apple's product development and operating system investment. Alternatively, Mehta might order Google to share its search data with competitors, which CEO Sundar Pichai warned would effectively amount to a "de facto divestiture of search." As a counter offer, Google proposes a more limited remedy that would allow it to continue paying for default placement of its search engine, but with an annual renegotiations and greater freedom for smartphone manufacturers to choose which Google apps to install on their devices. The Google case represents just one of five major tech antitrust actions currently pursued by the U.S. government, with Meta facing similar scrutiny in the same courthouse. Google recently lost a separate case regarding its ad technology business and may face additional divestitures, while Apple and Amazon are also expected to confront antitrust challenges in US courts.

Alphabet stock falls amid Apple AI search plans By Investing.com

Investing.com -- Alphabet (NASDAQ:GOOGL) shares fell 5% following reports that Apple (NASDAQ:AAPL) is considering the implementation of an AI search feature in its browser, potentially challenging Google's dominance in search. The decline comes as Apple's senior vice president of services, Eddy Cue, revealed that searches in the company's browser experienced a decline for the first time in April. Cue also mentioned that Apple is actively exploring the addition of AI search capabilities to its browser, sparking concerns over Alphabet's future revenue share from search. These comments suggest that Apple may be looking to reduce its reliance on Google's search engine, potentially impacting Alphabet's ad revenue. Cue's remarks, which were first reported by Bloomberg, emerged during a trial over Google's search practices. The trial has brought to light Apple's consideration of other search providers like Perplexity and Anthropic as possible alternatives. This news has alarmed investors, as Google's search engine has been a significant source of revenue for Alphabet, and any shift in market dynamics could have substantial financial implications. While the full impact of Apple's potential move into AI search is yet to be seen, Alphabet's stock reaction reflects immediate investor concern over the company's ability to maintain its search-related revenue if Apple becomes a competitor in this space.

Google Stock Slides as Apple's AI Search Plans Revealed in Court | Investing.com UK

Apple's (NASDAQ:AAPL) senior vice president of services, Eddy Cue, revealed during court testimony that the company is actively exploring a shift toward AI-powered search in its Safari browser, causing Alphabet (NASDAQ:GOOGL) shares to plummet and raising questions about the future of the lucrative Google-Apple search deal. During testimony in the US Justice Department's antitrust lawsuit against Alphabet Inc., Apple's Eddy Cue made significant revelations about the company's search strategy. Cue noted that Safari browser searches declined for the first time last month as users increasingly turn to AI alternatives. He explicitly stated his belief that AI search providers like OpenAI, Perplexity AI, and Anthropic will eventually replace traditional search engines like Google. "There's enough money now, enough large players, that I don't see how it doesn't happen," Cue said regarding the transition from standard search to AI. He explained that even if AI search indexes need improvement, these new platforms offer features that are "so much better that people will switch." Apple already offers OpenAI's ChatGPT as an option in Siri and plans to add Google's (NASDAQ:GOOG) Gemini later this year. The company has also explored partnerships with Anthropic, Perplexity, DeepSeek, and Grok. While Cue indicated Apple will add AI search providers as options in Safari, he cautioned they "probably won't be the default" yet. The heart of the Justice Department's case centers on the estimated $20 billion annual deal making Google the default search engine in Safari. Despite his enthusiasm for AI alternatives, Cue admitted he still believes Google should remain Safari's default search engine due to superior financial terms. He revealed he has "lost sleep over the possibility of losing the revenue share" from the Google agreement. Last year, the companies expanded their partnership to include Google Lens integration in the iPhone's Visual Intelligence feature, allowing users to analyze images using Google's AI. The court testimony also shed light on internal negotiations. Before selecting ChatGPT for Apple Intelligence in iOS 18, Apple conducted a "bake-off" with Google. According to Cue, Google had provided a term sheet with conditions "Apple wouldn't agree to and didn't agree to with OpenAI." Meanwhile, Apple's agreement with Microsoft's (NASDAQ:MSFT) Bing, a non-default option in Safari, was recently amended to operate on a year-to-year basis. News of Apple's potential strategic shift had immediate financial consequences. Alphabet shares tumbled as much as 7% on Wednesday, with the stock trading at $152.45, down $12.75 (7.72%) as of 12:11 PM EDT. The decline was significantly higher than the broader market, with trading volume reaching 29.4 million compared to an average of 22.2 million. Apple shares weren't immune either, slipping as much as 2.5% following Cue's testimony. The S&P 500 Index briefly turned negative, erasing earlier gains that had topped 0.5%. The market reaction underscores the significance of the Google-Apple search deal to both companies. Google's year-to-date performance now stands at -19.85%, substantially underperforming the S&P 500's -4.49%. Despite current volatility, analyst price targets for Alphabet remain optimistic, with an average target of $200.79 compared to the current trading price. *** Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Jefferies: Google stock sell-off after Apple exec comments was an 'overreaction' By Investing.com

Investing.com -- Google stock fell sharply on Wednesday following comments from Apple's Senior Vice President of Services, Eddy Cue, during his testimony in the Department of Justice's antitrust case against the search giant. Cue said that search volume in Apple's (NASDAQ:AAPL) Safari browser declined in April for the first time in over two decades and suggested that AI-driven platforms like Perplexity, OpenAI, and Anthropic could become viable alternatives to traditional search engines. Although Cue emphasized that Google should remain Safari's default, the remarks sparked a selloff, wiping out $155 billion in market capitalization from Alphabet Inc Class A (NASDAQ:GOOGL), whose stock dropped 7.26%. Commenting on this, Jefferies analysts believe the share price drop was an "overreaction." "We believe GOOGL -7% reaction to Apple exec's comments at antitrust trial is overdone," analysts led by Brent Thill said in a note, arguing that Google's AI advancements and broad search ecosystem are being overlooked. They highlighted the rapid adoption of AI Overviews, which now attract more than 1.5 billion monthly active users, and noted that monetization remains similar to traditional search, with potential for further gains. Jefferies also pointed out that Safari represents only part of the search market. Chrome holds 66% of global browser share compared to Safari's 17%, and iOS accounts for just 18% of operating systems. Meanwhile, daily active users of the Google app on iOS rose 15% year-over-year in April, "showing growth in users who go directly to Google for searches," analysts said. "Considering Google's substantial payment to Apple to be its default search provider, it is logical that Apple might highlight data points supporting the narrative that Google is not anti-competitive in search, citing risks of AI providers, which could benefit Google's case in appealing against claims of anti-competitive behavior," they added. Google's core search business remains strong, analysts note, with first-quarter revenue up 10% year-over-year, accelerating from single-digit growth in 2023. AI Overviews, now used by over 1.5 billion users monthly, and visual search via Lens have shown continued momentum. According to April 2025 StatCounter data, Google still commands around 90% of global search engine market share, including 94% on mobile and 79% on desktop. Jefferies views Alphabet's current valuation as attractive. The stock trades at 9.7x next-twelve-month EV/EBITDA -- just above its 10-year trough of 9x and below the historical average of 12x.