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Investing.com -- Google stock fell sharply on Wednesday following comments from Apple’s Senior Vice President of Services, Eddy Cue, during his testimony in the Department of Justice’s antitrust case against the search giant.
Cue said that search volume in Apple’s (NASDAQ:AAPL) Safari browser declined in April for the first time in over two decades and suggested that AI-driven platforms like Perplexity, OpenAI, and Anthropic could become viable alternatives to traditional search engines.
Although Cue emphasized that Google should remain Safari’s default, the remarks sparked a selloff, wiping out $155 billion in market capitalization from Alphabet Inc Class A (NASDAQ:GOOGL), whose stock dropped 7.26%.
Commenting on this, Jefferies analysts believe the share price drop was an “overreaction.”
“We believe GOOGL -7% reaction to Apple exec’s comments at antitrust trial is overdone,” analysts led by Brent Thill said in a note, arguing that Google’s AI advancements and broad search ecosystem are being overlooked.
They highlighted the rapid adoption of AI Overviews, which now attract more than 1.5 billion monthly active users, and noted that monetization remains similar to traditional search, with potential for further gains.
Jefferies also pointed out that Safari represents only part of the search market. Chrome holds 66% of global browser share compared to Safari’s 17%, and iOS accounts for just 18% of operating systems.
Meanwhile, daily active users of the Google app on iOS rose 15% year-over-year in April, “showing growth in users who go directly to Google for searches,” analysts said.
“Considering Google’s substantial payment to Apple to be its default search provider, it is logical that Apple might highlight data points supporting the narrative that Google is not anti-competitive in search, citing risks of AI providers, which could benefit Google’s case in appealing against claims of anti-competitive behavior,” they added.
Google’s core search business remains strong, analysts note, with first-quarter revenue up 10% year-over-year, accelerating from single-digit growth in 2023.
AI Overviews, now used by over 1.5 billion users monthly, and visual search via Lens have shown continued momentum.
According to April 2025 StatCounter data, Google still commands around 90% of global search engine market share, including 94% on mobile and 79% on desktop.
Jefferies views Alphabet’s current valuation as attractive. The stock trades at 9.7x next-twelve-month EV/EBITDA—just above its 10-year trough of 9x and below the historical average of 12x.