Google Traffic Remains Strong Despite Rise of AI-Powered Rivals

Bank of America's recent analysis has highlighted a reassuring trend for Alphabet (NASDAQ:GOOGL), parent company of Google, as its enormous traffic base remains intact despite the rise of AI-powered rivals. According to data from Similarweb, Google's global daily web visits increased by 3% year-over-year to 2.8 billion in August and remained flat month-over-month.

The growth of AI-driven services such as ChatGPT, Gemini, Claude, Meta AI, and Grok did not erode Google's dominant position in the search market. In fact, Google's traffic base continued to expand, with its daily active users growing 12% to 2.3 billion.

Justin Post from Bank of America noted that Google's traffic remained largely stable as AI adoption expanded the search market, suggesting consumers are adding chatbots without abandoning Google. Alphabet also owns Gemini, which gives it exposure to both traditional search and conversational answers.

While ChatGPT has gained over a billion users and its advertising business reached $1 billion in annualized revenue run rate, Bank of America does not expect a meaningful impact on Google's traffic this year due to the vast size of the Western digital advertising market exceeding $600 billion.