Market may underappreciate strength of Google’s existing LLMs, says Evercore ISI

Commenting on this weekend’s New York Times article that some Google (GOOGL) engineers have been in a state of "panic" due to a fear that Google could be displaced by Bing as the default Search engine on Samsung devices by Microsoft’s (MSFT) Bing, Evercore ISI analyst Mark Mahaney agrees with "the general sentiment" that OpenAI and ChatGPT "provide the greatest threat to Google’s Search dominance that the company has seen in years." However, the firm also believes the market may underappreciate the strength of Google’s existing LLMs, or large language models, like Bard, and its "working assumption" is that Google will successfully rebuild its Search engine to include LLM responses when appropriate. Evercore, which anticipates Google maintaining "both its Search market share and its very profitable unit economics," keeps an Outperform rating and $125 price target on shares of parent Alphabet.