AI search landscape shifts: Gemini's traffic in December surged 24% month-on-month, while ChatGPT dropped 9%.
The competitive landscape of the AI search market is undergoing significant changes.
According to Wind Chasing Trading Desk and the latest Bank of America Merrill Lynch research report citing third-party agency Similarweb statistics, Gemini's global average daily web visits surged 24% month-on-month in December, whereas ChatGPT's visits declined 9% month-on-month.
BofA analyst Justin Post pointed out in the report that the slowdown in ChatGPT traffic growth may be related to Google's launch of "AI Overviews" and the rising popularity of Gemini. Analysts believe that as more Google searches are presented in a native AI format, Wall Street may be underestimating the potential upside for Google's search business in 2026, and maintain a "Buy" rating for Alphabet.
Traffic Divergence: Gemini up 24% MoM, ChatGPT down 9% MoM
Global data for December shows, according to Similarweb statistics, Google’s average daily webpage visits increased 1% year-on-year to 2.7 billion, ChatGPT increased 49% year-on-year to 178 million, Bing declined 9% to 110 million, and Gemini soared 567% year-on-year to 56 million.
Month-on-month data shows Google down 1.0%, ChatGPT down 9.0%, Bing down 2.1%, while Gemini is up 24.2%.
In the US market, Google’s average daily traffic was flat year-on-year at 531 million, ChatGPT increased 86% year-on-year to 31 million (6% of Google), Bing fell 0.5% year-on-year to 44 million. Month-on-month, Google was flat, ChatGPT down 8%, Bing was flat, Gemini up 24%.
Mobile DAU: Gemini up 17% MoM, ChatGPT up 2% MoM
According to Sensor Tower data, Google global mobile daily active users (DAU) increased 12% year-on-year (up 1% MoM) to 2.1 billion in December, ChatGPT DAU increased 262% year-on-year to 392 million (up 2% MoM), Bing decreased 9% year-on-year to 5 million, Gemini up 351% year-on-year to 62 million (up 17% MoM), Perplexity up 341% year-on-year to 10 million, Grok at 9 million.
In December, Gemini gained 9 million new global DAU, ChatGPT gained 6 million, Grok gained 1 million, reflecting that AI functionality continues to drive mobile use growth, with Gemini showing relatively strong recent performance.
Despite the emergence of numerous AI applications, Google’s dominant position in the core search market remains unshaken, and is even reinforced. According to Statcounter data, Google’s global search market share rose by 84 basis points month-on-month and 110 basis points year-on-year in December, reaching 90.8%.
Challenges from Emerging AI Platforms
Aside from ChatGPT, other emerging large language model (LLM) platforms have grown rapidly, but remain relatively small in scale.
Perplexity.ai’s global traffic in December increased 92% year-on-year to 6 million, but dropped 8% month-on-month; Claude.ai rose 134% year-on-year to 6 million, down 6% month-on-month. Musk’s Grok performed relatively well, rising 11% month-on-month to 9 million.
The Bank of America report points out that the combined global average daily traffic of these emerging AI sites still accounts for less than 1% of Google’s 2.7 billion daily visits. In terms of app downloads, the gap with Google remains enormous. In December, global downloads of Google’s app were 9.8 times those of Bing, and 1.9 times those of Perplexity.
Optimistic on Gemini’s attractiveness and search business upside potential
BofA Securities maintains its "Buy" rating for Alphabet and sets a target price of $335.
BofA believes data shows the appeal of Gemini 3.0 large model is continuously driving traffic and app downloads. As the proportion of native AI format in Google Search continues to rise, higher user engagement and improved conversion rates are expected to drive Google's search business monetization beyond market expectations in 2026.
From a valuation perspective, Alphabet’s current trading price is about 24 times the estimated GAAP EPS for 2027, slightly higher than the average of 22 times since 2016. BofA believes that considering its double-digit revenue growth expectations, expanding cloud business margins, and robust AI assets, this valuation level is reasonable.
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