Google Stock Drops as Search Popularity Declines: What Investors Need to Know

May 7, 8:55 am

Alphabet (GOOGL), the parent company of Google, saw its stock plunge over 7% today, falling to $152 per share - near the lower end of its 12-month range between $142.66 and $208.70. The company’s price-to-earnings (PE) ratio now sits at 17.26, and today’s sell-off was triggered by concerning signals about Google’s core search business.

The latest blow came from surprising court testimony by Eddy Cue, Apple’s head of services. Cue revealed that for the first time in April, the volume of Google searches declined. This is particularly meaningful because Apple receives up to $20 billion a year from Google in exchange for keeping it as the default search engine on Safari across iPhones, iPads, and Macs. Every time a user types a search in Safari, Google earns revenue — and now that stream appears to be slowing.

Even more worrying for Google: Cue said Apple is actively exploring AI-based search alternatives within the iOS ecosystem, explicitly mentioning names like Perplexity, Anthropic, and ChatGPT. While ChatGPT is already integrated into Siri, it doesn’t yet serve as a direct search engine replacement - but the landscape is shifting fast.

Alternative Data Confirms the Downward Trend

At AltIndex, we dig deeper than headlines by analyzing alternative data sources that help investors spot long-term trends. Google Trends data shows a notable decline in searches for “Google” over the past three years. While some may dismiss this, arguing that users don’t need to search for Google to reach it, many people do search for “Google” simply to click through to Google.com.

What’s even more striking is the comparison to rising rivals. Worldwide search interest in ChatGPT has been climbing steadily, overtaking Google’s search momentum in many regions. This shift suggests that user attention is drifting toward AI tools - a warning sign for Google’s dominance.

We also track web traffic data, and the numbers align with these signals. According to our estimates, traffic to Google.com is down approximately 9.5% year over year, indicating not just less search interest, but potentially declining user engagement on one of Google’s most important properties.

Estimated web traffic to Google.com

What This Means for Investors

For investors, these signals are concerning. Alphabet still commands massive market power, but clear cracks are beginning to form in its most important business line: search. While Google has been advancing its AI capabilities, it has yet to find a way to fully integrate them without putting its lucrative search and advertising business at risk.

Now, with Apple openly exploring AI-driven search alternatives and users increasingly turning to tools like ChatGPT, Google’s long-standing dominance in the search market faces real threats. Investors should closely monitor how well Alphabet can adapt - whether it can leverage AI to strengthen its core products or whether new competitors will steadily chip away at its market share.

If you want to stay ahead of shifts like these, AltIndex can help. We track alternative data signals - from web traffic and search trends to social media sentiment and app downloads - to give investors an edge in understanding where companies are headed before it’s fully reflected in the stock price. Sign up today to access the insights that matter most.

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