Alphabet's Stock Soars as Google Faces AI Challenges and Antitrust Scrutiny

As of last week, Alphabet's stock (GOOGL) climbed by 1.60%, experiencing a one-week increase of 2.06% and a year-to-date rise of 3.54%. The company now holds a market capitalization of approximately $2,399.236 billion. Notably, on January 17, 2025, GOOGL stocks closed at $196, marking a 1.60% increase within the day, with a trading volume of 27,735,100.

Alphabet Inc., the parent company of Google and its various subsidiaries, continues its aggressive expansion across multiple sectors such as technology, life sciences, and capital investments. Google, established in California on September 4, 1998, and re-incorporated in Delaware in August 2003, remains a pioneer in internet search, cloud computing, and advertising technologies, providing a multitude of internet-based products and services.

Despite the launch of its latest iOS generative AI application, Gemini, Google's efforts in the AI chatbot market are lagging behind its competitors, namely OpenAI’s ChatGPT and Anthropic’s Claude. These competitors dominate the market with a substantial lead in paying customers. Analytics data suggests that of those who subscribe to Gemini Advanced, approximately 60% maintain their subscriptions after six months, which is notably lower compared to the retention rates of ChatGPT Plus and Claude Pro users.

On January 16, 2025, Google's stock saw an intraday increase of 3.04%, closing at $195.43 with a trading value of $17.5 billion. Financial reports up to September 30, 2024, indicate that Google's total revenue soared to $253.549 billion, showing a year-on-year growth of 14.68%, while net profit attributable to the parent company escalated by 38.55% to $73.582 billion. Additionally, the company's stock received an upgraded target price of $225 by a key investment firm, indicating continued investor confidence.

On January 13, Google Cloud introduced an automotive AI assistant capable of multimodal reasoning and multilingual support, with Mercedes-Benz set to implement this technology in its MBUX virtual assistant for new vehicle models later this year.

Meanwhile, Alphabet is under scrutiny by British regulators employing new antitrust rules designed to address unfair market dominance in digital markets. The investigation focuses on Google's market power in search and ad services and their implications for consumers and businesses. This inquiry is part of a broader initiative by global regulators to curb the influence of major tech conglomerates. Google's spokesperson emphasized the importance of search innovation for economic growth and the company's commitment to constructive cooperation with the UK authorities.

The UK Competition and Markets Authority (CMA) is evaluating whether Google's practices stifle innovation and if its market power is being used to favor its services, including emerging AI-driven "answer engines." According to CMA, Google holds a market share exceeding 90% for all online search queries in the UK, raising concerns over competitive fairness and data transparency.