For many years, Google has maintained its status as the world's leading search engine, largely without facing any significant competition. This dominance has translated into impressive financial returns for its parent company, Alphabet Inc. (NASDAQ: GOOGL), which has outperformed the market for the past two decades. However, a new challenge may be emerging that could disrupt this trend.

The rapid rise of artificial intelligence (AI) chatbots, particularly platforms like ChatGPT, presents a potential threat to Alphabet's traditional revenue streams. These AI systems are not just novelties; they are reshaping how people interact with information and, by extension, how businesses approach digital advertising.

Recent market dynamics have already begun to reflect concerns regarding Alphabet's future profitability. As trade tensions escalated, fears and volatility swept through Wall Street, leading to a significant sell-off in tech stocks, including Alphabet. As of now, the company's shares are trading nearly 25% below their recent highs, marking one of the steepest declines in years.

The crucial question now is whether Alphabet's stock represents a buying opportunity for long-term investors. While the recent downturn might seem alarming, it could provide a chance for those willing to look beyond short-term fluctuations. To determine the soundness of this investment, it is essential to analyze the underlying business fundamentals.

Can Google and ChatGPT Coexist?

Advertising revenue generated from search results constitutes more than half of Alphabet's overall business. Given this reliance, the specter of competition from ChatGPT and similar AI platforms raises valid concerns. Recent data from Semrush indicates that ChatGPT attracted approximately 5.19 billion visits in February 2025. While this number is impressive, it pales in comparison to Google's staggering 139.9 billion visits during the same month, underlining that Alphabet still holds a significant lead.

Google's well-established brand has enjoyed two decades of consumer loyalty, and it is unlikely that such trust and familiarity will vanish overnight. Nevertheless, should ChatGPT continue its meteoric rise and start to chip away at Google's market share, the impact on Alphabet's business model might not be as dire as it appears.

Despite the increasing use of AI technologies, it is essential to remember that approximately one-third of the global population still lacks internet access. With Google handling over 5 trillion searches annuallymore than double the volume it processed in 2016the company is positioned to capitalize on a growing user base. Moreover, global spending on digital advertising continues to climb at a healthy rate of high single digits. This trend suggests that both Google and ChatGPT could coexist and grow simultaneously, rather than one directly hindering the other's progress.

In fact, in the fourth quarter of 2024, revenue derived from Google Search advertising surged 12.5% year over year. This strong performance indicates that, at least for now, Alphabet's search engine is far from decline, allowing investors to maintain confidence until a noticeable downturn in its performance emerges.

Google Cloud: The Emerging Star

For long-term investors, it's crucial to maintain a forward-looking perspective, considering that Alphabet's business landscape may evolve significantly over the next five to ten years. One of the most promising segments within the company is Google Cloud, which has rapidly ascended to become the worlds third-largest cloud platform and is currently Alphabet's fastest-growing business unit.

In the fourth quarter of 2024, Google Cloud reported a remarkable revenue increase of over 29% compared to the previous year. This outstanding growth rate signals that the company has a long runway ahead in the cloud computing sector, which continues to gain momentum as businesses increasingly transition to digital operations.