The Stock Of Alphabet Rises As Bofa Says Chatgpt Buzz Hasn't Affected Google's Shares

Alphabet Inc. shares were up 2% in Monday morning trading, poised to reach a new 52-week high, as the strong rally they have been experiencing continues.

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Since closing at $89.13 on February 24, when concerns arose about the rise of ChatGPT and its potential impact on Google's market share against Microsoft's Bing search engine, Alphabet's stock, the parent company of Google, has surged more than 40%.

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However, Alphabet has been able to reassure investors regarding its own artificial intelligence initiatives, and recent data suggests that the ChatGPT frenzy is not significantly affecting Google's core search business.

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In a note to clients on Monday, BofA Securities analyst Justin Post highlighted that third-party web-traffic data through May 17 indicates "stable" traffic for Google, while Bing's growth has slowed down and ChatGPT's traffic appears to be moderating.

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Post mentioned that Bing downloads have increased compared to pre-surge levels in late April, but global downloads for Google remain stable, suggesting that Bing's activity is merely incremental.

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It is worth noting that the traffic data does not include the period after the launch of the ChatGPT iOS app on May 18. However, data up to May 20 revealed that the app garnered 710,000 downloads within the first three days.

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Post emphasized the importance of traffic data for the ChatGPT app in shaping Google sentiment, but currently, there is no evidence of it impacting Google's traffic significantly. He highlighted that ChatGPT is still unable to provide answers on current events or support external links like search, which are advantages that Google possesses.

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Furthermore, Post found encouragement in a recent report indicating that Samsung Electronics has concluded its internal review and decided against replacing Google with Bing as the default search engine on its native mobile internet app.

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"We believe that Google's superior performance, monetization, and ecosystem advantages for Android partners will help maintain its position as the default search app. We continue to see Google's search distribution as one of the key factors, in addition to its superior data and AI capabilities, contributing to our belief that AI integration will have an incrementally positive effect on Google's market position," Post wrote.

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Overall, Alphabet Inc. remains on a strong trajectory, with its stock showing resilience amidst the ChatGPT hype and maintaining a positive outlook for its core search business.

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