Apple's prediction of AI replacing traditional search engines caused a 7% drop in Alphabet stock

From Nasdaq: 2025-05-14 07:15:00

Last week, Alphabet’s stock took a hit after an Apple executive predicted traditional search engines would be replaced by AI-powered features, causing a 7% drop. With 56% of Alphabet’s revenue coming from Google search, this shift could have a major impact on the company’s future.

Alphabet is already incorporating AI into search results, offering users quick summaries at the top of the page. While the market reacted negatively, Alphabet stands to benefit if Apple no longer requires payment for default search status, potentially boosting profits by $20 billion and making the stock look very cheap.

Despite the market’s fear, Alphabet’s stock is trading at a low forward earnings multiple of 16, presenting a great opportunity for investors. If Alphabet can eliminate the $20 billion it pays Apple, the stock could become even more attractive. This could be a new beginning for Alphabet, not the end.

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Read more at Nasdaq: Is This the End for Alphabet Stock?