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No sign of Google search share loss despite ChatGPT growth - BofA

Published 03/13/2023, 02:24 PM
Updated 03/13/2023, 02:25 PM
No sign of Google search share loss despite ChatGPT growth - BofA

BofA's Justin Post told investors on Monday that Alphabet (NASDAQ:GOOGL) Inc Class C (NASDAQ:GOOG)CFO Ruth Porat's recent commentary on AI suggests "products are coming and costs are manageable."

The analyst, who has a Buy rating and $125 price target on Alphabet, added that there are no signs of Google search share loss despite ChatGPT's growth.

"Recent daily traffic data indicates that ChatGPT growth continues, but w/w trends are moderating with recent daily Web visitor high of 48.5mn up only 100k w/w," wrote Post. "Bing downloads have been elevated since Microsoft (NASDAQ:MSFT)'s OpenAI announcement on Feb. 7th, but w/w downloads have declined over the past two weeks. Data also suggests Bing activity is not impacting Google Web traffic or search download activity, which has been stable since November."

Citing data from Statcounter, Post said Google's February market share "actually increased 50bps m/m to 93.4%," and they expect little to no impact from the ChatGPT ramp on Google search revenues in the first quarter.

"Google CFO Ruth Porat spoke at a broker conference last week and provided some higher-level AI commentary that we viewed as constructive given concerns on: 1) Google readiness for AI search transition, 2) potential share loss in search, and 3) potential for significant AI-related cost ramp. As for AI readiness, Ms. Porat indicated that Google is building on a decade of "extraordinary" AI work and will be launching a number of LLM-based products in the next weeks and months," the analyst continued.

"We continue to see strong data and technology advantages for Google and see potential for stable search metrics and LLM-based product releases over the next few months."

By Sam Boughedda

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