From Nasdaq: 2025-04-23 13:38:00

Alphabet (GOOGL) faces scrutiny over its advertising model as large language models intercept high-intent queries, threatening Google’s revenue. With 57% of Alphabet’s 2024 revenue coming from search-related advertising, the rise of LLMs poses a significant challenge. Analysts are closely watching how Google will respond to this evolving landscape.

Google’s search and ad model is being pressured by LLMs, leading to fewer opportunities for Google ads and a critical vulnerability in their revenue stream. As user behavior shifts towards LLMs for direct answers, Google must evolve its strategies to maintain ad revenue per query and prevent the loss of users to more efficient platforms.

Antitrust issues loom for Google, with Perplexity CEO Aravind Srinivas advocating against the breakup of Chrome from Google. The tech landscape is changing rapidly with the rise of AI, putting pressure on companies like Google to adapt. As Alphabet prepares for its earnings report, the market is watching closely to see how they navigate these challenges.

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Read more at Nasdaq: Google Jeopardy: Advertising, DOJ Threats Pressure Alphabet Stock