Alphabet’s (NASDAQ:GOOGL) dominance of the search market has been under threat on account of the rise of GenAI. Meanwhile, its own AI chatbot Gemini is still awaiting relaunch after being taken off the market due to some embarrassing history-related gaffes that had the internet in vicious putdown mode.
Yet, given Google still commands 90%+ of the global internet search market, it would be foolish to write the Search empire off yet. In fact, recent survey results from Oppenheimer, as shared by firm analyst Jason Helfstein, underscore the bullish sentiment.
“Following our ~1K person survey on Search/AI user behavior, we think GOOG shares remain attractive ahead of 1Q results and potential Gemini update at May Google I/O event given derisked model, discount to NASDAQ, and mixed/bearish investor sentiment,” the 5-star analyst said.
Helfstein, who ranks amongst the top 2% of Street stock pros, notes several takeaways from the survey. For one, it shows voice assistants will likely “drive higher search frequency.” Currently, 31% of individuals utilize voice assistants on a regular basis, and 53% would be willing to use voice search more frequently than text search if the quality of it improves. This suggests that as voice search technology advances, it has the potential to significantly boost overall search activity. This is particularly relevant when considering the potential integration of Gemini in iPhones with Siri acting as the voice assistant.
Talking of Apple, in the event of a shift away from Google as the default search engine on iPhones, the survey shows that Google’s search dominance would continue anyway, with 75% of iPhone users saying they would opt for Google if required to choose a default search engine.
It also appears as if GenAI is complementing rather than substituting search. 48% of respondents who use AI assistants search Google more often compared to before AI assistants became common, whereas only 8% indicate searching Google less frequently. “Therefore,” says Helfstein, “contrary to investor fears that genAI could replace search, survey results suggest the use of AI assistants could increase search frequency.”
Bottom line, Helfstein rates GOOGL shares as an Outperform (i.e., Buy), while raising his price target from $172 to a Street-high of $185. Should the figure be met, investors will be pocketing returns of ~19% in a year’s time. (To watch Helfstein’s track record, click here)
Amongst Helfstein’s colleagues, 28 other analysts join him in the bull camp, while the addition of 7 Holds can’t detract from a Strong Buy consensus rating. The average price target stands at $165.43, implying shares will post growth of ~7% over the 12-month timeframe. (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.
