TOP STORY
🍎 Google Drops -7% After Apple Exec Says AI Will Replace Search

🤯 There were so many big headlines and swings in the market this week, it was hard to pick a top story:

• 👴 Berkshire Hathaway ($BRK-B) fell -5% this week after Buffett stepped down as CEO

• 🚗 Tesla ($TSLA) has rallied +18% in the past month as Trump hints at a cut to US tariffs on Chinese imports

• 💊 Hims & Hers Health ($HIMS) jumped +23% this week (and +94% in the past month) after doubling Q1 profits and revenue

• 🪙 Bitcoin surged past $100,000 again (up +26% this month) as optimism grows ahead of US-UK trade talks

• 🏰 Disney ($DIS) jumped +18% after beating earnings and announcing plans to build a theme park in Abu Dhabi

• 🛢️ Enbridge ($ENB) is up +10% this month and just reported earnings with record Q1 revenue growth

🎯 But for today’s Top Story, let’s zero in on the news impacting one of the Most Held stocks on Blossom: Google ($GOOG).

📉 This week, while the market stayed flat (with the S&P 500 up 0.08%), Google fell -7% and is now down -19% year-to-date, putting it in 2nd-worst place out of the Mag 7 for YTD performance (after Tesla, which is down -21%).

🔍 So let’s take a look at what’s going on, and whether this is just short-term pain for Google or a fundamental threat to the search giant’s throne.

🔍 Is Google’s Search Dominance Under Threat?

🔍 We’ve all noticed it. We’re Googling less, and ChatGPT’ing more. But up till now, Google stock has largely been unimpacted, rising over +60% since ChatGPT was released.

😰 But that changed this week when Apple executive Eddy Cue announced that April was the first month ever where search activity on Safari (which is powered by Google) had ever slipped, attributing the declining volume directly to the new AI-driven tools everyone is using.

🤖 Cue says that, because of this, Apple will likely add generative AI search options from OpenAI or Perplexity as search options in Safari. This is a threat to Google, and a potentially massive shake-up of the long-standing partnership between Google and Apple, in which Google pays Apple ~$20B, equivalent to 36% of all search advertising revenue, for being the default search engine on Apple devices.

Long-time Wall Street Journal columnist Dan Gallagher summed up the problem nicely with his headline:

📉 These new fears caused the stock to plummet 9% overnight - the company’s third-largest share price decline since going public in 2004.

💰 With Google Search accounting for 55% of Google’s revenue, this is no small problem.

🚨 And Eddy isn’t the only one issuing a warning, according to Fortune, data shows that Google’s market share of traditional search engine traffic has fallen below 90% for the first time since 2015.

🤖 Even worse, overall, traditional search engines are losing traffic to AI tools, of which Google only has a 5.6% market share (compared to 80% from ChatGPT).

💃 And ironically, it’s not just AI that Google is losing ground to - Gen Z are increasingly turning to TikTok and Instagram for product, travel, and restaurant recommendations, with more than half using these platforms instead of Google as their primary search tool.

🔍 According to Bernstein analysts, Google’s share of search has already dropped substantially:

🥊 But Google didn’t take these comments laying down, quickly issuing a statement rejecting Apple’s claim - with many analysts coming to its defense.

🤿 But before we dive into Google’s response and what the future holds for Google, a quick word from this week’s sponsor, Guardian Capital

PRESENTED BY GUARDIAN CAPITAL
💸 Why HISAs Don’t Pay What T-Bills Do

🚨 Investors continue to allocate to safe-haven, cash-alternative solutions, but may not be optimizing their yield potential.

🍁 In Canada, High-interest savings accounts (HISA) and HISA ETFs have considerable assets parked within them, but it’s important to be aware that the yields offered by HISA solutions often are below those of T-Bill securities.

💡 One of the main reasons for this is that banks typically use HISA deposits to fund other loans and investments, paying less interest than what they earn from those activities (maximizing their profit). T-Bills are not governed by the banks, rather they are government-backed debt securities with attractive yields and short maturity profiles.

⭐️ Consider Guardian Capital LP’s Ultra-Short T-Bill Funds – offering ETF series, for your cash-alternative positioning.

Distribution Yield (ann.)*

• 2.74% Guardian Ultra-Short Canadian T-Bill Fund (ETF ticker: GCTB)

• 4.11% Guardian Ultra-Short U.S. T-Bill Fund (ETF ticker: GUTB.U)**

• Ideal cash solutions and tactical volatility shields

• 100% exposure to government-backed T-Bills

• Higher yield potential than HISA ETFs*** and fully liquid, unlike non-redeemable GICs

^{*** As at April 30, 2025, updated monthly. The Annualized Distribution Yield shown is the most recent regular distribution (excluding any year-end special distribution), annualized for frequency and divided by current net asset value of the ETF series of the Fund.}

^{*** This Fund’s units are offered and its NAV is calculated in USD.*}

^{**** Based on a comparison of similar yield figures of the 5 largest HISA ETFs in Canada, as most recently posted on their respective websites Tickers for those ETFs are: CSAV, PSA, HISA, CASH and HSAV.*}

^{See Guardian Capital Disclaimer at the bottom of the newsletter!}

TOP STORY CONT.
❌ Alphabet Says AI is Not Hurting Search Volumes

With Google’s stock in freefall, the company quickly put out a short 84-word blog post defending itself, with the first sentence summing things up:

In the blog post, Google implies that investors are misinterpreting the data, saying:

• People are searching more (even on Apple devices), but aren’t necessarily using Safari to do it - leveraging new modes of searching like Google Lens, which aren’t supported in the Safari app

• Google’s own ‘AI Overviews’ have increased search usage and result in more “commercial searches.”

• The biggest decline in Google searches come from searches around “math and homework” which don’t deliver much ad revenue anyway.

🛡️Analysts Defend Alphabet

Now, obviously, Google is going to defend itself, but analysts were also quick to clap back - with analysts at Jefferies, TD Cowen, Citi, and JPMorgan all maintaining Buy or Overweight ratings on the stock, calling Apple Exec Eddy Cue’s comments “overdone”.

The analysts pointed out that the context of Cue’s comments was important. Cue wasn’t just randomly talking smack about Google out of nowhere, Cue was on the stand testifying in an antitrust case that threatened to shake up Google’s search monopoly.

In a way, Cue was actually helping out Google by arguing that the search market is competitive, so that Apple doesn’t lose its $20B deal.

🌼 My Thoughts

🤷‍♂️ Overall, I’m conflicted. It seems quite obvious to me that Google is facing more competitive threats than ever before, and its dominance is at risk.

Even Google’s ad chief has said “the writing is on the wall” for generative AI’s eventual cannibalization of Google Search. And while Google is very aware of this, and actively taking steps to combat it (i.e. with AI Overviews which reportedly generate the same amount of revenue for Google as traditional searches), it seems unlikely they’ll be able to maintain the insane >90% market share they’ve enjoyed for years.

Some studies also show that even though adoption of the AI overviews is high, the click-through rates for AI Overviews are 35% lower, which is reflected in the growth of Google’s ‘paid clicks’ slowing from a 5% growth rate to a 2% growth rate in the most recent quarter.

So with all that in mind, personally, I plan to stay away from Google, but if you want a more optimistic take (or just join the discussion), check out @jacobb’s post on Blossom:

💖 P.S. I want to give a genuine huge shout-out to @jacobb. He is legit one of my favourite accounts on Blossom and delivers the kind of thoughtful, insightful, and well-researched content that Blossom was made for - backed up by his real portfolio. If you want to show Jacobb some love, subscribe to his newsletter here, which he pours his heart and soul into every week!

PRESENTED BY CIBC CDRs
🍁 Want to trade globally but prefer to trade in $CAD?

💡 CDRs allow you to buy global-listed companies, like Nvidia, Amazon and Tesla in Canadian dollars on a Canadian exchange. Over 100 of the world’s best known companies are now available as CDRs, at a fraction of the global share price.

⭐️ CDRs provide you with the following benefits when compared to buying shares of a foreign company directly:

• ✅ No currency conversion: CDRs trade in Canadian dollars, so you don't need to factor currency conversion into your investment decisions.

• ✅ Fractional ownership: While some blue-chip stocks cost hundreds or thousands of dollars per share, CDRs give you exposure at a fraction of the price.

• ✅ Easy to buy and sell: You can buy and sell CDRs, even for companies that are outside North America, on the platform of your choice, just like regular stocks and ETFs.

• ✅ Managing FX exposure and risk: The built-in notional currency hedge mitigates the currency risk associated with foreign investing. This means that the investment returns depend on the performance of the underlying shares, and not the currency in which it is traded.

🌐 Start investing in global giants, without leaving home.

IN PARTNERSHIP WITH CBOE CANADA
🚨 New ETF Alert! Global X Launches New Small-Cap and Bitcoin ETFs!

🙏 The markets keep blessing us with new ETFs and in partnership with CBOE we’re keeping you updated on all the new listings 🫡

⭐️ Just a few weeks ago, Global X launched 3 new ETFs, covering small-caps and Bitcoin, with their tried and true Covered Call strategy:

• Global X Enhanced Russell 2000 Covered Call ETF (RSCL) - provides exposure to small-cap US equities by tracking the performance of the Russel 2000 RIC Capped Index and seeks to provide high monthly distributions of dividend income and call option premiums using a dynamic covered call option program.

• Global X Bitcoin Covered Call ETF (BCCC) & Global X Enhanced Bitcoin Covered Call ETF (BCCL) – two new ways to earn income and get Bitcoin exposure. One uses a covered call strategy with semi-monthly distribution, the other adds a light leverage feature.

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week

👇 Click to see the full post!