The Google stock price has crashed into a bear market this year as concerns about the technology industry continues. After peaking at $208 earlier this year, the Alphabet share price has plunged by almost 20% to the current $167. This article explains why Google is at risk from Grok’s growth.
Google is being disrupted
Google stock has a long history of outperformance as it jumped from about $25 during its IPO to the current $167. This growth happened as the company became the most dominant player in the search engine industry, where it has become a monopoly.
Attempts to disrupt Google have all failed in the past. Not many people use its top competitors, like Yahoo, DuckDuckGo, and Bing.
Recently, however, there are signs that Google has found a real threat from artificial intelligence models. Its top competitors are Grok, ChatGPT, DeepSeek, and Perplexity.
While all these are good products, we believe that Elon Musk’s Grok is Google’s biggest threat to date.
Launched in 2023, Grok’s parent company, xAI, has become one of the fastest-growing players in the AI industry. It has raised $12 billion from investors and is now valued at over $40 billion.
Grok operates as an independent website but is mostly used as part of X, formerly Twitter. It recently expanded to Telegram, a social media application with almost 1 billion users.
While ChatGPT is the most popular AI model, Grok has the biggest potential to disrupt Google. That’s because it has a vast trove of data on X and other places. Most importantly, there are signs that Grok is more accurate than ChatGPT on some simple queries.
Grok is a big disruptor for Google because Google’s Gemini product has not lived to the hype. At the same time, the emphasis on Search Engine Optimization (SEO) has made Google Search worse over time.
Alphabet’s business is still growing
Still, it will take a long time for Grok to fully disrupt Google because of the moat the company has created over time.
That’s because Alphabet dominates the search engine industry. It has also invested in Android, a mobile operating system that has billions of users. The company’s Chrome browser has the biggest market share.
Further, Alphabet has more divisions, including YouTube, Cloud, and other bets. The most recent financial results showed that Alphabet’s search revenue rose from $48 billion in Q4’23 to $54 billion in Q4’24.
The company’s YouTube Ads revenue jumped from over $9.2 billion to $10.4 billion. Google Cloud made $11.95 billion from $9.1 billion a year earlier.
Analysts anticipate that the first-quarter revenue rose by 10.8% to $89.3 billion. Its annual revenue for the year will be $389 billion, up by 11.3% from last year.
Read more: Google’s growth engine sputters: why Wall Street is worried about Alphabet’s future
Google stock price technical analysis
GOOG chart by TradingView
The weekly chart shows that the Alphabet share price peaked at $208 earlier this year, and has moved to $158.70, its lowest point this month. It has remained above the 100-week Exponential Moving Average (EMA).
The stock has formed a doji candlestick pattern, comprising a small body and a long lower shadow. A doji is one of the most bullish patterns in the market.
The Google share price has formed a giant megaphone chart pattern. This is a popular pattern made up of two ascending and broadening trendlines. Therefore, there is a likelihood that the Google stock price will continue rising as bulls target the key resistance point at $200, up by 20% above the current level. A drop below the key support at $158 will invalidate the bullish outlook.
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