ChatGPT Set to Disrupt Google’s Search Ad Dominance, Warns Wells Fargo

Wells Fargo has issued a stark warning for Google’s (GOOGL) advertising empire, projecting that ChatGPT could become a major disruptor in the $340 billion search ad market by the end of the decade. As generative AI reshapes how users interact with information online, analysts believe OpenAI’s flagship product ChatGPT, backed by Microsoft (MSFT), is emerging as a formidable rival, threatening to erode Google’s long-standing dominance in digital search advertising.

Search War Heats Up

Although ChatGPT currently accounts for around 8% of global search activity, it hasn’t yet tapped into the search advertising space. However, according to the Wells Fargo team led by analyst Ken Gawrelski, that’s likely to change soon.

He anticipates OpenAI will begin rolling out sponsored ads within the next year, leveraging its vast user base of over 500 million weekly active users, 95% of whom are on the free plan. As a result, Wells Fargo projects that ChatGPT could command 30% of the global search ad market by 2030, potentially generating $100 billion in annual ad revenue. While ad revenue is expected to lag behind usage growth initially, Gawrelski believes it will catch up by the end of the decade.

Google’s Search Empire Faces Major Threat

Google may rule the search world today with a towering 90% market share, but its reign could shrink to just 60% by 2030, according to Wells Fargo. Additionally, Wells Fargo warns that as ChatGPT enters the search ad arena, it could spark a drop in cost-per-click (CPC) ad pricing. Even a modest one-point dip could shave roughly 1% off Google’s fiscal 2026 earnings per share.

Are Google Shares a Good Buy?

Overall, Wall Street analysts have a Strong Buy consensus rating on GOOGL stock based on 29 Buys and nine Holds assigned in the past three months. The average GOOGL price target of $199.11 per share implies an 18% upside potential.

See more GOOGL analyst ratings