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Investing.com -- Google (NASDAQ:GOOGL)’s search business is expected to remain stable despite increasing competition from AI chatbots, according to DeepWater Asset Management’s Gene Munster in his preview of the company’s upcoming June quarter earnings.
Munster anticipates Google Search revenue will grow 9% year-over-year in the June quarter, slightly down from 10% growth in March but in line with Wall Street expectations. This stability comes despite growing competition from ChatGPT, which is rapidly gaining users and could reach 500 million daily active users this summer, though still below Google’s estimated 3 billion Search daily active users.
Google’s recently launched "AI Mode," which Munster describes as "basically search on ChatGPT," represents the company’s most aggressive response yet to AI competition. The feature was announced on May 20 and rolled out to the US and India within six weeks, marking what Munster calls the fastest new product launch for the company.
Munster expects Google’s management to maintain the message from their March earnings call that AI is augmenting Search rather than cannibalizing it. However, he notes that while Google’s AI strategy may protect user engagement, "it will ultimately prove negative for monetization."
Beyond Search, Google Cloud is expected to grow at 28%, slightly ahead of consensus estimates of 27%. The cloud segment continues to be a growth standout compared to Search and is improving in profitability, with 18% margins in the March quarter.
Waymo, Google’s autonomous driving unit, is gaining traction with 200,000 paid rides per week and could add upside to Google’s valuation. Munster believes Waymo could be worth between $350-850 billion by 2030 if spun off, potentially adding 15-35% to Google’s overall valuation.
Overall, Wall Street expects Google to report total revenue growth of 11% year-over-year and GAAP EPS growth of 13% for the June quarter, compared to revenue growth of 12% in March 2025.
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