Despite a strong day in the broader market, shares of Alphabet (GOOG 0.02%)(GOOGL 0.02%) traded roughly 2.8% lower as of 12:59 p.m. ET today. The move came after ChatGPT’s parent company, OpenAI, teased the launch of its artificial intelligence (AI)-powered web browser, ChatGPT Atlas.

A threat to search dominance

Earlier today on X, OpenAI posted a very short video teasing its new web browser, and CNBC reported that it will soon be available to the general public.

Image source: Alphabet.

Investors have been increasingly concerned about the launch of AI-powered browsers and search engines when it comes to Alphabet, which has long dominated the search business. In fact, over half of Alphabet’s revenue comes from search, so if these AI-powered browsers can take share of the market, Google and Alphabet could certainly be in trouble.

Today’s Change

(-0.02%) $-6.00

Current Price

$250.55

Key Data Points

Market Cap

$3103B

Day’s Range

$244.15 – $254.88

52wk Range

$140.53 – $257.33

Volume

2.2M

Avg Vol

35M

Gross Margin

58.92%

Dividend Yield

0.00%

Google has responded with the creation of its AI-powered Overviews on top of search queries that are powered by Gemini. The company has also rolled out AI Mode, which seems similar to ChatGPT in that users can ask follow-up questions like with a conversational AI chatbot. For the most part, analysts have been impressed with the engagement between users and Google’s AI-powered overviews.

The company owns many strong businesses

AI-powered browsers are certainly a threat to Google’s search business, but this is a company with near-infinite resources that should be able to respond, as evidenced by the success of AI Overviews.

Alphabet also owns many spectacular businesses with strong growth prospects including Waymo, YouTube, Google cloud, a chip business, and a quantum project. Trading at about 25 times forward earnings, the stock is still a buy in my view.