Google vs. Apple in the AI Race: Market Share and Valuation Analysis

The rapid advancement of artificial intelligence (AI) has significantly reshaped the global tech landscape, particularly in the realms of search engines and smart devices. Recently, reports have emerged that Apple plans to integrate AI-driven search capabilities into its Safari browser, a strategic move that could pose a substantial challenge to Google’s long-standing dominance in the search market. As the core revenue driver for Alphabet (Google’s parent company), the search business is pivotal. Analysts predict that if Apple successfully erodes Google’s market share, Alphabet’s fair valuation could decline to a range of $130 to $140 per share. This potential shift has sparked widespread discussion among investors: Can Apple meaningfully capture Google’s market share? Does Alphabet’s dip present a buying opportunity? And what are the target prices for both companies moving forward?

From a technical perspective, Google maintains its leadership in the search market through cutting-edge AI algorithms (e.g., Transformer models), vast data resources, and the infrastructure of Google Cloud. According to StatCounter, as of May 2025, Google holds over 90% of the global search engine market share. However, Apple’s competitive potential cannot be underestimated, given its 1.5 billion active iOS and Mac devices. If Safari enhances its search experience through AI and leverages Apple’s privacy-first approach, it could attract a portion of Google’s user base. Furthermore, Apple’s closed ecosystem, bolstered by Siri and Apple Intelligence, may deepen user engagement with its search functionality.

That said, Google’s resilience should not be overlooked. Its Android ecosystem spans over 3 billion devices globally, and Chrome commands roughly 65% of the desktop browser market. Google can counter Apple’s moves through algorithmic improvements and ecosystem integration. Meanwhile, Apple’s AI search is still in its nascent stages, lacking the data scale and algorithmic sophistication of Google, making a full replacement unlikely in the near term.

From an investment standpoint, if Alphabet’s stock price falls to the $130-$140 range, it may reflect an overreaction to competitive risks, potentially creating a “buy-the-dip” opportunity. Conversely, Apple could see a valuation premium driven by its AI strategy. Based on current trends and financial metrics, a conservative target price for Alphabet might range from $150 to $160, while Apple could reach $220 to $230 (based on 2025 projected revenues and P/E ratios). However, the competitive dynamics over the next 6-12 months will be decisive. This AI-driven rivalry not only tests technological prowess but also has the potential to redefine the tech industry’s competitive landscape, making it a critical space to watch.