Alphabet (NASDAQ:GOOGL) shares just took a 7% hit after word got out that Apple (NASDAQ:AAPL) might be working on its own AI-powered search tool for Safari, a move that could threaten Google’s grip on the search market.
The sell-off followed comments from Apple’s services chief, Eddy Cue, who said Apple is exploring ways to add AI-driven search to its browser. That raised a red flag for investors worried that Apple might be gearing up to rely less on Google – and that could take a bite out of Alphabet’s ad revenue.
These comments came up during the ongoing Google vs. DoJ antitrust trial, where it was also revealed that Apple has shown interest in alternative search engines like Perplexity and Anthropic.
At the heart of the trial are allegations that Google has abused its dominance by paying billions to maintain its default status on browsers and mobile devices, effectively stifling competition. Regulators argue these exclusive agreements, particularly with companies like Apple and Samsung, limit consumer choice and entrench Google’s monopoly in search, making it harder for rivals to gain meaningful market share.
Barclays analyst Ross Sandler estimates that if behavioral remedies are enforced globally, they could affect Alphabet’s earnings by up to 19% in 2027.
“Our overall views on remedies haven’t changed over the course of the trial. We still anticipate a two-fold impact including: 1) Google may lose its paid search access points via losing distribution contracts with device OEMs (Apple, Samsung, etc) and browser companies (Mozilla), and 2) Google could be forced to syndicate search text ads to competitors. We had previously estimated that these two remedies could result in a 15% gross profit reduction if implemented worldwide, and half of that if the remedies only cover the US,” Sandler noted.
Still, Sandler is sticking with the bullish case. The analyst is keeping a Buy rating on Alphabet shares and setting a $220 price target, pointing to a potential 45% surge from here. (To watch Sandler’s track record, click here)
He’s not alone, either. Wall Street is largely in agreement, with 28 analysts calling GOOGL a Buy and just 8 sitting on the fence. That consensus earns the stock a Strong Buy rating, and the average price target of $198.79 suggests there’s around 31% upside on the table. (See GOOGL stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.