As the AI race hurtles toward 2026, market analysts are sharply divided on the fortunes of tech giants, warning that Alphabet Inc.-owned
The Search Paradox
While speaking to Schwab Network, Cory Johnson, Chief Market Strategist at Epistrophy Capital Research, argues Google faces a unique existential threat: to stay relevant, it must disrupt its own highly profitable business model.
Google has historically generated immense revenue by providing search links that users click for information. However, generative AI provides direct answers, eliminating the need for those clicks.
"It cannibalizes their business," Johnson explained. He noted that when Google presents AI results, they provide answers rather than links, which cuts straight into their primary revenue stream.
Johnson pointed to data suggesting users are significantly less likely to click away to other sites when provided with an AI-generated answer compared to traditional search results.
Microsoft's Relative Safety
Conversely, John Freeman, Co-Founder of Ravenswood Partners, favors Microsoft heading into 2025 and 2026.
Freeman argues Microsoft offers significant AI upside through its Azure cloud platform-which recently posted 35% growth-without facing the same internal disruption risks as Google.
Freeman stressed that core profit engines like Windows and Microsoft 365 are unlikely to be disrupted by AI in the near term, positioning the company as a safer relative bet.
The Infrastructure Boom
Beyond the software giants, both analysts agree the immediate investment opportunity lies in the massive infrastructure buildout required to power AI.
While Johnson focuses on the broad spending toward data centers, networking, and power, Freeman specifically highlighted the "memory trade."
He recommended Micron Technology Inc.
GOOGL Surged 76% In 6 Months
Alphabet's Class A shares soared by 76% over the last six months and 65% over the last year. On Monday, the stock rose 0.44% to $316.54 apiece.
