Tech titan Alphabet (GOOGL) has long been known as the top name in the search industry. It’s to the point where we even encourage people to “Google” a topic rather than “look it up.” But now, its primacy has been challenged by OpenAI’s new SearchGPT search engine. That was enough to send Alphabet shares down nearly 2% in Thursday afternoon’s trading.
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SearchGPT is out to do what Google always meant to do with a series of algorithms: provide “…fast and timely answers with clear and relevant sources.” The tool hasn’t actually been released yet, but it’s currently in alpha testing. Once it’s ready, though, it will be added to ChatGPT.
There are signs that ChatGPT could do many of the same things that Google does now, only potentially better. Worse, Alphabet’s own attempts, like the AI Overview, haven’t exactly gone off without a hitch. In fact, reports noted that many queries would return “nonsensical or inaccurate results,” which absolutely does no favors for a search engine.
Concerns Overblown?
If things go according to plan, SearchGPT would certainly represent a killer force against Alphabet. However, Alphabet isn’t exactly lacking in the AI development department. Things didn’t always work out as hoped, but recent earnings reports suggest that it’s hardly out yet.
Alphabet’s earnings report revealed that its search engine operations were enough to lift the whole company up, even as YouTube ad sales went largely flat. It’s also worth noting that the Google search engine and YouTube still represent the two most frequently visited websites on Earth, ensuring that Alphabet’s position in the market will be around…at least for a while.
Is Alphabet a Buy or Sell Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 34 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 30% rally in its share price over the past year, the average GOOGL price target of $204.50 per share implies 21.58% upside potential.
