Google Search Regains Ground, Driving Alphabet's Financial Performance

Google's financial performance is largely driven by its search engine, which accounts for more than half of the company's revenue and over 70% of profits, according to Evercore ISI analyst Mark Mahaney.

Mahaney told CNBC that Google Search remains the key driver of Alphabet's (NASDAQ:GOOGL) (NASDAQ:GOOG) financial performance. However, the company had lost share as consumers increasingly turned to OpenAI's ChatGPT in early 2025.

But Mahaney said this trend has since reversed, with Google improving its core search product and regaining share. The company also maintains a strong position in commercial searches, including queries tied to travel, restaurants, and other purchase decisions.

This supports Alphabet's advertising business, which relies on the strength of its search position. Mahaney noted that 'the stronger the search position in the platform, the better the ad revenue.'

Evercore's research also shows Gemini narrowing the gap with ChatGPT, with Gemini now within roughly three percentage points of ChatGPT when consumers are asked about AI agents.