Alphabet Inc., the parent company of Google s search engine, has remained the dominant force in online search for many years. However, the rapid increase in OpenAI’s ChatGPT and its incorporation in Microsoft’s Bing search engine has made investors anxious of Alphabet’s future market share and revenue. In response to these concerns, Alphabet has taken measures to stay ahead of the competition, such as consolidating its AI research groups into one unit and reducing its exposure to Alphabet stocks.
Currently, Alphabet has 85% of the worldwide online search market share, in comparison to 8.9% held by Bing. These figures indicate that any change in Google’s revenue could have a huge impact. To make matters worse, tech giant Samsung Electronics has considered replacing Google’s search engine with Microsoft’s Bing as the default platform, resulting in Alphabet’s stock falling 4%.
Despite these challenges, analysts agree that Alphabet is still well-positioned for the long-term. For instance, Alphabet’s estimated earnings is priced lower than its 10-year average and is a discounted stock in the Nasdaq index in comparison to the other three major stocks.
As for the people involved, Sundar Pichai, the Chief Executive Officer of Alphabet, has taken significant steps to keep Alphabet at the top with his executive decision in consolidating their AI research groups into one unit. In addition, Michael Lippert, the portfolio manager at the Baron Opportunity Fund reduced his exposure to Alphabet due to the risk posed to Google’s search business if market share begins to slip.
Overall, Alphabet still dominates the online search industry, however investors and Alphabet executives remain cautious of potential challenges that may arise due to the emergence of ChatGPT.
