Wells Fargo Sounds the Alarm: Is ChatGPT Poised to Challenge Google’s Advertising Dominance?
Wells Fargo has delivered a jarring forecast for Google’s advertising empire, suggesting that OpenAI’s powerful tool, ChatGPT, could significantly disrupt the burgeoning $340 billion search ad market by the decade’s end. As generative artificial intelligence (AI) transforms how users engage with information online, analysts posit that the backing of Microsoft (MSFT) positions ChatGPT as a formidable contender, threatening to undermine Google’s long-standing supremacy in digital search advertising.
The Search War Enters a New Era
Currently, **ChatGPT accounts for approximately 8% of global search activity**, yet it has yet to make inroads into the search advertising sector. However, Wells Fargo’s team, led by analyst Ken Gawrelski, anticipates that this situation is about to change rapidly.
The expectation is that OpenAI will commence the rollout of sponsored ads within a year, tapping into its impressive user base of over **500 million** weekly active users, **95% of whom are on the free plan**. Projections indicate that ChatGPT could seize **30% of the global search ad market by 2030**, potentially raking in **$100 billion in annual ad revenue**. While ad revenue might lag behind user growth initially, Gawrelski asserts that it will align closer to usage projections by the end of the decade.
Google’s Search Empire Faces a Disruption
Though Google currently controls a staggering **90% market share** in the search domain, forecasts from Wells Fargo suggest that its influence could dwindle to **60% by 2030**. As ChatGPT ventures into the search ad landscape, the firm warns of possible declines in cost-per-click (CPC) ad pricing. Just a **one-point decrease** could lead to a potential **1% dip in Google’s fiscal 2026 earnings per share**—a notable threat to its financial stability.
Should You Invest in Google Stock? A Look Ahead
Despite the looming challenges, Wall Street’s consensus remains optimistic about GOOGL stock, showcasing a **Strong Buy rating** based on **29 Buys and nine Holds** in the last three months. The **average price target** for GOOGL stands at **$199.11 per share**, implying an **18% upside** potential.
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