New Data Shows that ChatGPT Is Impacting Google's (GOOGL) Search Dominance
New data shows that OpenAI's ChatGPT may slowly be taking users away from Google Search. Indeed, at Coatue Management's recent East Meets West conference, the investment firm shared stats from SimilarWeb (SMWB) showing that two years after people start using ChatGPT, they do about 8% fewer Google searches each month. It is worth noting that Alphabet (GOOGL), the parent company of Google, has already admitted that ChatGPT is a real threat.
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In fact, in an antitrust hearing this April, Sissie Hsiao—the former head of Google's Gemini chatbot—said that ChatGPT has already replaced some search queries, especially for homework and math help. While those types of searches don't bring in much advertising money, Hsiao's testimony suggested that the growing popularity of AI tools could lead to larger, long-term threats.
As a result, Google's ad chief, Vidhya Srinivasan, said that losing commercial searches—the kind tied to shopping and ads—is not just a risk, but something that is 'inevitable.' The latest data suggests that this shift is already starting to happen. And that is a big deal because most of Google's revenue comes from ads on its search platform. Meanwhile, OpenAI, which is backed by Microsoft (MSFT), continues to improve ChatGPT and make it even easier to use, which could pull even more users away from Google over time.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 29 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $199.11 per share implies 14.88% upside potential from current levels.
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