Alphabet shares dropped more than 7% on May 7 after reports surfaced that Apple is considering integrating an artificial intelligence-powered search option into its Safari browser. This new feature could potentially replace Google as the default search engine, raising concerns about Alphabet’s future in online search.
Apple and Google have long maintained a lucrative partnership. It is estimated that Google pays Apple around $20 billion annually to remain the default search engine in Safari. In return, Apple receives a significant share of Google’s advertising revenue generated through the browser. However, the possibility of Apple moving away from Google raises new fears that artificial intelligence could disrupt Google’s dominance in the search engine market.
Since the beginning of the year, Alphabet’s stock has fallen about 20%, partly due to concerns that an economic slowdown could negatively impact advertising spending and revenue. Wednesday’s drop pushed the stock to around $151.
From a technical perspective, Alphabet’s stock broke below a rising wedge pattern—a bearish signal—on higher-than-average volume. The decline also coincided with the Relative Strength Index (RSI) falling below the key 50 level, signaling increasing selling pressure.
Key support levels to monitor include $141, where previous lows and past peaks converge. A further drop could bring the price down to $131, a level that aligns with the 200-day moving average and a prior pullback low. On the upside, resistance may appear around $165, near the wedge’s former peak and a previous support level from last November. A move beyond that could target $182, a zone associated with a longer-term trendline stretching back to June 2024.
Investors and analysts are watching closely to see how Alphabet navigates this potential shift in its relationship with Apple and whether the company can maintain its dominant position in online search amid the growing influence of AI.
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