Alphabet to face challenges in search business amid ChatGPT competition, says Melius Research

Eastman Kodak

31/03/2025 18:51

** Brokerage Melius Research flags concerns from the investor community about Google's GOOGL.O search business, especially since the launch of ChatGPT in November 2022

** Emphasizes that GOOGL's EPS increased by 76% from 2022 to 2024, but the stock only rose by ~8% during that period

** Brokerage says it is skeptical about the government forcing a break-up of Alphabet and doesn't believe the board is focused on creating value through a "sum of its parts" approach

** Brokerage compares co's situation to Eastman Kodak KODK.N, which faced a severe decline due to technological shifts

** "We view AI summaries as a 'tweener' that doesn't match ChatGPT’s simplicity for answers — and could lead to lower ad revenue for loyal customers," Melius Research

** Including session's moves, GOOGL stock down 18.8% YTD

(Reporting by Padmanabhan Ananthan)

((Padmanabhan.Ananthan@thomsonreuters.com))