Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) reported stronger engagement across its AI ecosystem in September, driven by a surge in Gemini’s user growth following the rollout of its viral image-generation tools.
Meanwhile, Google Search traffic remained stable, underscoring the platform’s resilience amid rising competitive pressure from OpenAI’s ChatGPT.
Bank of America analyst Justin Post maintained a Buy rating on Alphabet with a price forecast of $252, based on a 22x multiple of 2026 estimated core Google GAAP EPS plus cash per share.
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The analyst shared September web traffic data from Similarweb, showing continued strength for Google and significant momentum for Gemini.
Globally, average daily web visits to Google rose 0.8% year-over-year to 2.8 billion, while ChatGPT surged 90% to 197 million, and Bing declined 2.2% to 116 million. On a month-over-month basis, Google traffic increased 1.8%, ChatGPT rose 4.0%, Bing fell 2.7%, and Gemini grew 54%.
In the U.S., Google’s web visits were flat year-over-year at 537 million, ChatGPT was up 124% to 33 million (about 6% of Google traffic), and Bing increased 9% to 48 million. On a month-over-month basis in the U.S., Google traffic increased by 3.2%, ChatGPT rose by 16%, Bing declined by 8%, and Gemini advanced by 37%.
The bank cited Sensor Tower data showing strong growth in mobile daily active users (DAUs) across AI platforms in September. Google’s global mobile DAUs increased 13% year-over-year (flat month-over-month) to 2.0 billion, while ChatGPT rose 452% year-over-year to 345 million, and Bing declined 13% to 5 million. Perplexity grew 446% year-over-year to 9 million, and Grok reached 5.7 million.
During September, Gemini added 8 million global DAUs, ChatGPT gained 15 million, Perplexity added 1 million, and Grok added 1.8 million, highlighting that AI capabilities are driving incremental mobile engagement. Analyst noted that in mid-September, the viral popularity of Google’s “Nano Banana” image generation model significantly boosted Gemini’s traffic and downloads, briefly propelling the app to the No. 1 spot on major app stores.
The bank stated that Statcounter data showed Google’s global search share improved month-over-month in September. Globally, Google’s market share rose 49 basis points (bps) month-over-month, compared to Bing’s 18 bps month-over-month increase.
On a year-over-year basis, Google’s search share was up 38 bps to 90.4%, reversing a 59 bps decline seen in August. Bing gained 14 bps year-over-year to 4.1%, while Others (including Yandex, Baidu, Naver, DuckDuckGo, and smaller engines but excluding ChatGPT) declined 63 bps year-over-year to 4.1%.
In the U.S., however, Google’s search market share fell 70 bps month-over-month to 85.0% and was down 297 bps year-over-year, while Bing’s share increased 55 bps month-over-month and 147 bps year-over-year to 8.5%.
Google’s global mobile search share rose 69 bps month-over-month, while Bing declined 5 bps month-over-month. Year-over-year, Google’s mobile share was up 44 bps (vs. down 74 bps in August) to 94.6%, Bing was down 10 bps year-over-year to 0.7%, and Others declined 51 bps year-over-year to 3.9%.
On desktop, Google’s global search share increased 91 bps month-over-month, while Bing declined 3 bps month-over-month. Year-over-year, Google’s desktop share rose 261 bps (vs. up 167 bps in August) to 82.2%, Bing lost 120 bps year-over-year to 10.6%, and Others declined 105 bps year-over-year to 4.4%.
Bank of America highlighted that among emerging AI platforms, Perplexity.ai, Claude.ai, and Grok continue to lead in user growth. In September, Perplexity.ai’s global traffic rose 137% year-over-year to 6 million (up 20% month-over-month), Claude.ai increased 124% year-over-year to 5 million (up 8% month-over-month), while Grok declined 5% month-over-month to 6 million.
Justin Post noted that global search interest for ChatGPT declined in September. Based on a seven-day average as of October 5, ChatGPT search interest was down 3% month-over-month, while Gemini increased 39% month-over-month and Bing remained flat.
Among emerging large language model (LLM)-based search platforms, Perplexity.ai maintained relatively higher keyword search interest, rising 2% month-over-month, whereas Claude declined 6% month-over-month and Grok was flat month-over-month.
Bank of America projects steady earnings growth for Alphabet over the next three years, estimating earnings per share of $10.06 in 2025, rising to $10.60 in 2026 and further to $11.58 in 2027. This represents year-over-year growth of 25.1% in 2025, followed by 5.4% in 2026 and 9.2% in 2027.
Price Action: GOOGL shares were trading lower by 0.45% to $244.66 at last check Wednesday.
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