Alphabet's search revenue miss fuels worries about AI-driven search decline

Analysts linked the weakness to growing competition from AI agents such as Meta’s Muse product and warned that a lasting decline in search could further depress valuation. Citi’s Andrew Boone downgraded Alphabet to market‑perform, and Yorkville Ives’ Dan Ives noted the first quarter where the “negative thesis around AI crushing search” has traction. Wall Street cut 2026 earnings‑per‑share estimates by 4.5%, while some investors point to accelerating cloud growth and the lower multiple as potential upside.

Despite the concerns, some investors see the dip as a buying opportunity, noting Alphabet’s strong cash position and expanding cloud business. The debate highlights how Google’s own AI advances may paradoxically threaten the search engine that made it dominant.