Apple exploring AI search for Safari, sending Alphabet, Apple shares down

Shares of Apple and Alphabet saw declines today amid a Bloomberg News report that Apple is "actively looking at" integrating AI-powered search engines into its Safari web browser.

Apple shares (NASDAQ:AAPL) were down 2% to $194.26, while Alphabet shares (NASDAQ:GOOGL) fell significantly by 5.6% to $155.96.

The report stems from testimony given by Eddy Cue, Apple's senior vice president of services, during the U.S. Justice Department's lawsuit against Alphabet.

Cue revealed that searches on Safari experienced a dip for the first time in April, a trend he attributed to the rise of AI.

Cue further stated his belief that AI search providers, including prominent names like OpenAI, Perplexity AI, and Anthropic, will eventually replace traditional search engines such as Google.

This outlook suggests a potential strategic shift for Apple, which currently has a lucrative agreement with Google to be the default search engine on its devices.

The news comes as both tech giants have experienced headwinds in their year-to-date stock performance.

Apple's shares are down approximately 21% since the beginning of the year, while Alphabet has seen a 13.8% decline over the same period.