From Morningstar: 2025-05-08 04:51:00

Apple’s Eddy Cue testified in the DOJ lawsuit against Alphabet, hinting at a Safari revamp that could end Google Search partnership. This move could impact Alphabet’s $20 billion annual revenue sharing deal with Apple. Analysts believe Google will still dominate search queries despite Cue’s comments on Safari search decline.

The potential change in the default search engine for Safari could have significant implications for both Apple and Alphabet. The revenue sharing agreement between the two tech giants accounts for a substantial portion of Alphabet’s annual revenue. Apple is likely to have a strategy in place to mitigate the impact of any changes to this agreement.

Despite concerns over the future of Google’s search dominance, analysts maintain a fair value estimate of $237 for Alphabet. They believe Google will continue to innovate in AI-powered search technologies to maintain its position in the market. While some migration of search queries is expected, Google is expected to adapt and remain a key player in the search business.

Investors may be overreacting to the potential changes in the search landscape. Google’s investments in AI-driven search technologies and a strategic approach to search monetization are expected to help the company navigate any shifts in the market. While growth rates may vary, Google is poised to remain a leader in digital advertising and search.



Read more at Morningstar: Alphabet: Apple Search Executive’s Testimony Makes…