Alphabet Focuses on AI Mode to Boost Search Growth: What's Ahead?

Alphabet’s GOOGL Search business is benefiting from AI infusion. The company is leading the search domain with 89.57% market share, followed by Microsoft’s MSFT Bing, with 3.88% share, Yandex’s 2.19%, Yahoo!’s 1.49%, DuckDuckGo’s 0.95% and Baidu’s BIDU 0.72%, per the latest data from StatCounter. According to Semrush data, Google handles more than 5 trillion queries annually, and there are an estimated 9.5 million Google searches per minute.Alphabet is advancing visual and contextual search capabilities. The Circle to Search feature is now active on more than 300 million devices. The company is adding functionalities to help people explore complex topics and ask follow-up questions without switching apps. AI Overviews now reach more than 2 billion users per month and are available in over 200 countries across 40 languages. Google’s AI-powered Search features are driving deeper engagement, with AI Mode offering advanced reasoning and multimodal responses.The launch of AI Mode in the United States and India — where GOOGL currently has more than 100 million monthly active users — is expected to drive further growth. AI Mode in Search is now expanded to more than 180 countries and territories in English. Alphabet has added new agentic and personalized capabilities, designed to help people complete tasks more efficiently and get results tailored to their interests. Alphabet plans further expansion into more languages and markets soon.The Zacks Consensus Estimate for third-quarter 2025 Google Search and other revenues is pegged at $54.84 billion, indicating 11% growth from the figure reported in the year-ago quarter.GOOGL Faces Tough CompetitionMicrosoft is keeping no stone unturned to improve the capabilities of Bing. MSFT has been integrating AI into Bing thanks to its partnership with OpenAI. The company introduced Copilot Search in Bing in April this year and launched Bing Video Creator in June. Meanwhile, Baidu has launched new AI-powered tools to support its search business. Baidu introduced an advanced video generation model that transforms still images into dynamic clips. BIDU’s search box now accepts up to 1,000 Chinese characters, far surpassing the previous 28-character limit. In March 2025, Baidu released ERNIE 4.5, which features multimodal capabilities and ERNIE X1, its first reasoning model. In April, Baidu launched ERNIE 4.5 Turbo and ERNIE X1 Turbo, which deliver improved performance at a much lower cost.GOOGL’s Share Price Performance, Valuation & EstimatesAlphabet shares have appreciated 9.6% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 12.9%.GOOGL Stock’s Performance Image Source: Zacks Investment Research The GOOGL stock is trading at a premium, with a forward 12-month price/sales of 6.94X compared with the broader sector’s 6.67X. Alphabet has a Value Score of C.GOOGL Valuation Image Source: Zacks Investment Research The Zacks Consensus Estimate for 2025 earnings is pegged at $10 per share, up 0.6% over the past 30 days, suggesting 24.4% growth from fiscal 2024’s reported figure.  Alphabet Inc. Price and Consensus Alphabet Inc. price-consensus-chart | Alphabet Inc. QuoteAlphabet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Baidu, Inc. (BIDU): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks