Google’s parent company, Alphabet, experienced a 7% stock decline following comments by Apple’s head of services, Eddy Cue, during antitrust testimony. Cue mentioned a decline in Safari search volume, attributed to user shifts toward AI tools like ChatGPT. This raised concerns about AI disrupting traditional search.
However, analysts at Jeffries argue the selloff is exaggerated. They note that while Apple’s browser holds 17% of the global market share, Google Chrome commands 66%, indicating Google’s continued dominance. Additionally, daily active users of the Google app on iOS have increased by 15% year over year.
Google’s search revenue grew 10% in Q1, demonstrating resilience despite competition. The company’s AI Overviews feature monetizes similarly to traditional search, maintaining profitability.
Alphabet now trades at 9.7 times forward EBITDA, below its long-term average, making the stock more attractive. Analysts at Jeffries maintain a ‘Buy’ rating, believing the market reaction is excessive.
— new from qz.com