Alphabet, the parent company of Google, is encountering heightened competition from generative AI platforms such as ChatGPT, leading to a drop in its stock value and market share in search. Despite generating significant free cash flow, the company is transitioning away from strong reliance on advertising revenue, with advertising still comprising 74% of its revenue. Alphabet has announced plans for substantial capital investment in its AI initiative, Google Gemini, but investor concerns remain, as evidenced by a nearly 20% decline in stock price in 2025.
Alphabet's steady free cash flow generation faces uncertainty due to the rise of generative AI platforms like ChatGPT, impacting its market position and stock valuation.
Despite launching its own generative AI, Google Gemini, Alphabet has not quelled investor concerns, leading to a significant drop in its stock price in 2025.
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