Apple’s AI Safari Plans Shake Up Google
Is Google's search dominance coming to an end? Which companies benefit from a world where AI search becomes more popular?
On Wednesday, May 7, 2025, Google’s stock GOOGL 0.00%↑ took a hard hit, falling 8% at the time of writing.
Why the tumble?
Apple AAPL 0.00%↑ testified during a court case they believe AI search engines will replace traditional search engines – and they are already seeing traffic declines for the first time ever.
What’s Going On?
Apple’s Service Vice President, Eddy Cue, was testifying in a U.S. antitrust trial. He said Apple’s “actively looking” at using AI to power Safari searches.
Cue mentioned some AI companies they’re chatting with including OpenAI (makers of ChatGPT), Anthropic (behind Claude), and Perplexity AI (with their Perplexity Assistant). He even revealed Safari searches dropped last month for the first time ever.
Cue believes people are using AI tools instead.
Apple gets $20 billion a year from Google to keep it as Safari’s main search engine.
Separately, Apple’s search deal with Google is under scrutiny in a DOJ case brought against Google. One legal expert I discussed this with believes this admission could help Google’s case that it’s not a monopoly – but obviously the court will have the final say in that.
Google’s shareholders are worried, and you can see why. Search traffic dropping for the first time ever on Safari is not a good sign and if Apple swaps Google for an AI search tool, Google could potentially lose a ton of users, marketshare and more importantly advertisers.
The Winners: Semiconductor Makers
The big winners here will be companies that are the driving force behind the AI companies taking share from Google.
Online advertising is dominated by just a select number of companies including Google, Meta, Amazon, and Microsoft. For the first time since the rise of social media – the door for a new competitor is wide open. Apple’s admission AI search is slowly taking over will only accelerate startups quest to join the leaders of online advertising.
This is going to lead to aggressive spending on datacenter and AI buildout. Google will be frantically trying to maintain a leadership position, along with everyone in the space trying to take them down.
At the top of the list is [REDACTED FOR PREMIUM SUBSCRIBERS] and [REDACTED FOR PREMIUM SUBSCRIBERS] . See my recommendation buy prices here.
I’ve also identified [REDACTED FOR PREMIUM SUBSCRIBERS] as a winner here early on. In my Blue Chip Portfolio I state: AI will rapidly disrupt search engine marketing. This will leave marketers scrambling to replace traffic and conversions that once came from traditional search and SEO. Marketers will turn to [REDACTED FOR PREMIUM SUBSCRIBERS].
Apple: Playing Both Sides
Apple’s stock dipped on the news, but don’t count them out.
They’re playing a smart game.
If Google is paying $20B now … how much are they (or someone else) willing to pay in the future? What if there’s a bidding war?
If Apple builds or partners with an AI search tool, Apple could keep more search profits for themselves. It’s reported Google pays more than 1/3 of the revenue it generates from Safari to Apple. That figure could go way up.
Overall, this is a shorter term headwind for Apple that could boost profits down the road. More competition is great for a platform provider like Apple.
How to Play It
Here’s how to turn this tech shakeup into a win for your portfolio:
Bet on AI Chips: [REDACTED FOR PREMIUM SUBSCRIBERS]
Watch Google Closely: [REDACTED FOR PREMIUM SUBSCRIBERS]
[REDACTED FOR PREMIUM SUBSCRIBERS]
The Bottom Line
I know my drumbeat of AI/Semiconductors has been consistent. But it’s still the early innings. The technology is far from perfect and many users, companies and governments are just beginning to implement it. 2025 demand is locked in stone – and later in the year [REDACTED FOR PREMIUM SUBSCRIBERS] .
As this supply of high-performance semiconductors hit the market – it will improve AI even further. Causing more adoption, users, etc.
Good news for Google is they have a fast growing datacenter business, but for a company without any business risk – I suggest [REDACTED FOR PREMIUM SUBSCRIBERS] . They will be a clear winner as startups race to become the “next Google”.
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Colin