Alphabet Loses $120 Billion as Safari Search Declines, Apple Eyes AI Integration and $20B Google Deal
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Alphabet Inc., the parent company of Google, saw its market value drop by approximately $120 billion this week as investors reacted to the growing impact of artificial intelligence on Google's core search business. The selloff followed testimony from Apple Inc.'s Senior Vice President of Services, Eddy Cue, who revealed that searches on Apple's Safari browser declined for the first time in over 20 years, citing a shift toward AI-powered search experiences.
Apple is considering integrating AI search engines such as Perplexity and OpenAI's ChatGPT into Safari. Google currently pays Apple an estimated $20 billion annually to remain the default search provider on Safari. The decline in Safari searches has heightened concerns that competitors like OpenAI and Anthropic are eroding Google's dominance in search, which remains a major source of Alphabet's revenue and profits.
Alphabet has stated that overall search queries, including those from Apple devices, continue to increase. The company continues to expand its AI-powered features, including Gemini-powered AI overviews, which now serve 1.5 billion users monthly. Alphabet's global search market share is about 89.7%, down from 92.9% in early 2023.
Alphabet generates over $156 billion outside of search through YouTube, Cloud, subscriptions, and other segments, representing nearly fourfold growth in eight years. In 2024, search revenue was 13% larger than the rest of the business combined.
Alphabet trades at 15 times forward earnings, compared to Microsoft's 30 times. Despite the recent decline, more than 80% of analysts tracked by Bloomberg rate the stock as a buy, and some suggest Apple's comments may be influenced by ongoing regulatory scrutiny of Google's search agreements.
$GOOGL Alphabet is trading at some of the lowest levels of P/E and EV/EBIT in a decade.
Relative to its 10Y history, the PE is in the bottom percentile, and EV/EBIT is in the 6th percentile. https://t.co/ZSGvCXTMy6
Netflix just launched a Generative AI-powered search tool—more than convenience, this signals the rise of AI-driven user experience as a strategic differentiator. Expect every platform to follow. #GenerativeAI #HardTrend #UX #DigitalTransformation
🔗 https://t.co/A8F1iiqi2L https://t.co/WZKUW2Am77
BERNSTEIN: Is this it for Search ( $GOOGL)?
Over the past two weeks, data points highlighting the slowest paid click growth in Google’s history combined with the first month ever of declining web search volumes on Apple devices validate investors’ feeling – it’s not just be them https://t.co/FOCAFP7CXW
Google now makes $156B+ outside of Search:
YouTube, Cloud, Subscriptions, Network, Devices, Other Bets.
That’s nearly 4x growth in 8 years.
Search may be disrupted, but it’ll keep generating strong cash flow to fund the rest, especially AI Search 👇 https://t.co/ahx0TO7Mbj
In 2017, $GOOG Search Revenue was 26% larger than the rest of the business combined. Last year Search was 13% larger. I wonder a) when Search drops below 50% of total revenue, and b) what the optimal outcome is for shareholders. https://t.co/kytQ5gyxJN
$GOOGL Alphabet is trading at some of the lowest levels of P/E and EV/EBIT in a decade.
Relative to its 10Y history, the PE is in the bottom percentile, and EV/EBIT is in the 6th percentile. https://t.co/ZSGvCXTMy6
$GOOGL now generates over $156B in revenue outside of their Search business - from YT, Subs, Network, Cloud, Devices, Platforms, Other bets...up almost 4x in the last 8 years.
Search is getting disrupted, but even in a decline, it will still generate big FCF for some time and https://t.co/1ciBhGKcfv
