Google’s Grip Loosens: Apple’s AI Search Sends Alphabet Shares Into a Tailspin

Alphabet stock dropped 5.8% today after Apple said that it is seriously considering including its own AI-based search capability within the Safari browser, a move that threatens to disrupt Google's stranglehold on the search business. Selling was initiated after Apple senior vice president of services, Eddy Cue, publicly revealed that Safari's use of search fell for the first time in April and testified that Apple is investigating new AI-based search features.

The news has stirred investor concerns about Alphabet's future search revenues because Apple's potential break with Google risks eroding the lucrative advertising partnership between the two tech giants. Apple was found to be weighing potential alternative search providers, including Perplexity and Anthropic, in a recent trial that looked into Google's search tactics, further stoking concerns about Alphabet's earnings prospects.

Apple shares were also lower by 2.1% as the technology sector volatility broadly moved. The reaction in the market highlights the stakes involved as the two companies work through the quickly changing dynamics of AI search and digital ads. Although the complete effect of Apple's AI search plans is uncertain, today's stock action shows short-term investor concern that Alphabet can maintain its central search business if Apple becomes a direct threat.

Source: Investing.com