Wall Street analysts say ‘time to buy’ Alphabet amid correction in shares

Shares of Alphabet (GOOGL) were under pressure on Wednesday after an Apple (AAPL) executive said the iPhone maker was exploring adding AI search to its Safari browser. In comments made during Google’s antitrust trial, Eddy Cue said searches in Apple’s browser fell for the first time in April and that Perplexity and Anthropic could be AI search partner options. Google has since said that it continues to see overall query growth in Search. That includes an increase in total queries coming from Apple’s devices and platforms.

Discussing the companies’ comments, Evercore ISI told investors that it would be a “buyer of the correction” in Alphabet shares, a sentiment shared by JPMorgan, which called the selloff on Eddy Cue’s testimony overdone. 

ADDING AI SEARCH TO BROWSER: Apple is “actively looking at” reshaping the Safari web browser on its devices to focus on AI-powered search engines in light of the potential fallout of its deal with Google and broader industry shifts, Bloomberg’s Mark Gurman, Leah Nylen and Stephanie Lai report. Eddy Cue, Apple’s senior vice president of services, made the disclosure Wednesday during his testimony in the U.S. Justice Department’s lawsuit against Alphabet. The heart of the dispute is Apple and Google’s estimated $20B-a-year deal that makes Google the default offering for queries in Apple’s included browser. He also noted that searches on Safari dipped for the first time last month, which he attributed to people using AI. Cue further stated that he believes AI search providers, including Microsoft (MSFT)-backed OpenAI, Perplexity AI and Anthropic PBC, will eventually replace standard search engines like Google. He said he believes Apple will add those players as options in Safari in the future.

With that said, the executive still believes Google should remain the default in Safari, saying that he has lost sleep over the possibility of losing the revenue share from their agreement, the authors write.

Meanwhile, Google said on Wednesday that it continues to see overall query growth in Search. That includes an increase in total queries coming from Apple’s devices and platforms. “More generally, as we enhance Search with new features, people are seeing that Google Search is more useful for more of their queries – and they’re accessing it for new things and in new ways, whether from browsers or the Google app, using their voice or Google Lens. We’re excited to continue this innovation and look forward to sharing more at Google I/O.” 

SELLOFF OVERDONE: JPMorgan says Alphabet shares traded down 7% on Wednesday on testimony at the Google commercial search trial from Eddy Cue, Apple’s senior vice president of Services. Cue noted that search volume on Apple was down in April for the first time in 20 years because people are using ChatGPT and Perplexity, indicated that Apple is considering adding artificial intelligence providers as search options on Safari and has had discussions with Perplexity and OpenAI, and emphasized that losing revenue share from Google would have a significant impact on Apple and its ability to create new products, the firm tells investors in a research note. JPMorgan believes the first two points suggesting share loss and increased competition “add more fuel to the bear fire which has weighed on Google for more than two years.” The firm, however, believes the selloff of Alphabet shares is overdone. It looks for the annual Google I/O event on May 20-21 to showcase additional AI and product innovation.

TIME TO BUY: Morgan Stanley says Alphabet sentiment has “(again) troughed” due to AI-disruption fears and more recently Q1 decelerating paid click growth as well as press reports of Apple talking with other partners like OpenAI and Perplexity AI to power its next generation “search” and also revealing that searches on the Safari browser dropped for the first time in April due to increased AI usage. Shares are now trading at about 15-times the firm’s FY26 $10 EPS estimate, which the firm calls “a trough multiple and in our view tactically a strong buying opportunity.” The firm adds that its $185 price target represents 22% upside and reiterates an Overweight rating on shares of Google’s parent.

Evercore ISI notes that the selloff put shares of Google’s parent down a total of 26% since an early February peak. The firm says it will “take the other side” and “be buyers of this correction.” Highlighting Google’s statement saying that it continues “to see overall query growth in Search. That includes an increase in total queries coming from Apple’s devices and platforms,” Evercore says that it is “plausible” that Cue’s statement reflects both a very mature low-single digit percentage Search query growth rate and Apple Safari browser share losses, as tracked by statcounter. The firm reiterates an Outperform rating and $205 price target on Alphabet shares.

FOCUS ON NEWER PRODUCTS: Citi keeps a Buy rating on Alphabet with a $200 price target after Apple’s Eddy Cue suggested that Google Search volumes on the Safari browser declined in April for the first time given rising adoption of ChatGPT, Perplexity AI, Anthropic, among others. The firm says that while competition in the search landscape is at its highest level potentially ever, it is focused on Alphabet’s newer products gaining generative AI share. Citi is positive on Gemini 2.5 and the expanded beta version of AI Mode.

PRICE ACTION: Shares of Alphabet have recovered some of yesterday’s losses and are about 2% higher in Thursday afternoon trading at $154.75.