Alphabet (NASDAQ:GOOGL) owned Google's share of the search market remains relatively stable despite concerns following the launch of ChatGPT late last year.
That is the view of BofA analysts, who revealed in a note Wednesday that both Google and Bing's market share declined in September.
"Statcounter's data indicates Google's search market share of 91.6% was slightly down in September, 27bps m/m and 84bps y/y, but remains relatively stable since ChatGPT launched late last year. In Sep, Bing search share also declined 2bps m/m to 3.0% and was down 44bps y/y, while Yandex was up 32bps m/m, capturing share gains from Google," explained the analysts, who maintained a Buy rating and $146 price target on GOOGL.
"For Global Web traffic, September Similarweb data suggests all major platforms saw m/m decline. Google traffic declined 10% m/m to 2.6bn, Bard traffic declined 30% m/m to 7.2mn, and Bing traffic declined 7% m/m to 37.4mn," they added.
The analysts noted that while September data suggests Google's web traffic remains relatively stable, they believe a modest overhang remains on potential search revenue disruption from AI/LLM integration.
Even so, BofA thinks that "with increasing advertiser adoption of Performance Max, and the ramp of AI-driven products like dynamic keyword campaigns, AI will be incrementally positive to Google's ad sales in 2H’23."
"We expect, with search growth accelerating, Google's core business will show strong margin leverage in 2H'23, and cost efficiencies in 2024 could drive upside to Street estimates," the analysts concluded.