Google loses over $160 billion amid concerns of declining dominance in Safari

On May 7, 2025, shares of Google parent company Alphabet experienced a steep decline of over 8%, driven by concerns regarding the company's dominance as the default search engine on Apple's Safari browser. This development occurred amidst Apple's announcement that they were 'actively looking' into integrating AI-powered search functionalities into Safari, which could potentially reduce Google's market share on Apple devices. Eddy Cue, the senior vice president of Apple's services unit, revealed this information during testimony related to a federal antitrust case against Google, indicating a shift in how users might engage with search engines on Apple products. The decline in Google’s stock, which fell to approximately $152 per share, resulted in a staggering loss of about $160 billion in market capitalization, surpassing the total valuations of well-known companies like Boeing, Nike, and Starbucks. This significant loss marked one of the largest single-day drops in Alphabet's market value since going public in 2004, highlighting growing investor concerns over Google's ability to maintain its market position amid technological advancements and changing consumer behavior. Apple's strategies for implementing generative AI search options alongside Google could fragment the search engine market, especially as search activity on Safari has recently seen its first decline ever, as mentioned by Cue. Although he believes Google will remain the default option for now, the introduction of competitors like OpenAI and Perplexity AI could disrupt existing user patterns and expectations, complicating the landscape for digital advertising revenues that are crucial for Google's financial health. This stock downturn for Google is not an isolated incident, as the company has faced various challenges related to its generative AI initiatives in recent months, including notable declines in its stock value on other occasions due to product missteps. In contrast, shares of Apple also saw a reduction of 1.5% on the same day, as they have similarly struggled during this period of transition towards AI technologies, indicating a broader trend impacting major tech firms in the industry.