Is Alphabet a Buy After 7.5% Slump?

When Microsoft (MSFT) unveiled Copilot, powered by ChatGPT, Alphabet (GOOG) did not have an answer. Its presentation and demos for AI failed to impress people at the time. Since then, the artificial intelligence investment cycle has accelerated. GOOG stock rose.Today, Google’s search business faces growing risks. Google pays Apple (AAPL) to set Google.com as the default Safari web browser search engine. However, Apple is exploring alternative AI-powered search. Perplexity, subjectively speaking, provides better AI search answers. Apple noticed that the search engine alternatives may provide a better experience.GOOG stock lost 7.5% on May 7 in response to Apple considering its efforts to revise the Safari AI-search environment.Is Alphabet a buy? The stock trades at a price-to-earnings ratio of 17 times. Year-to-date, the stock lost 19.76%. By comparison, Microsoft has a 33.5 times P/E. Apple is not far behind, with a P/E of 30.6 times.Stock markets are overly pessimistic about Google's advertising revenue. Competition for growing subscribers for AI chatbots is intensifying. Google Gemini is not the default winner in a world where AI will replace web searching.