Google can grab AI trade in a ‘winner take most’ scenario

Yahoo Finance Video and Julie Hyman

December 5, 2025

In this video:

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Alphabet’s Google (GOOG, GOOGL) has been gaining momentum as a serious AI contender, as users flock to the Gemini 3 chatbot and headlines that Meta Platforms (META) is looking to buy billions of dollars worth of semiconductor chips from Google.

RBC Capital Markets Equity Analyst Brad Erickson illustrates the potential for Google to grab a portion of the artificial intelligence ecosystem in a “winner-take-most” type of scenario.

Also catch Brad Erickson weigh in on reports that Meta will be reducing its Metaverse budget.

To watch more expert insights and analysis on the latest market action, check out more Market Catalysts.

Video Transcript

00:00 Speaker A

And as you mentioned, uh Gemini has been gaining some steam lately in terms of more people using it. and this is kind of scattered the AI trade to some extent, right? In in recent weeks, we’ve seen Alphabet shares certainly take off. How are you currently thinking about the sort of, you know, arms race within AI and who could win and whether that’s the way you should even be thinking about it from an investing perspective?

00:31 Speaker B

Yeah, no, I mean, for sure, when you think about just the history of consumer internet, flywheels, network effects, whatever word you want to use, typically you end up in a winner take most or if not winner take all type scenario. And so, you know, Google was our favorite idea starting out 2025. and I think, you know, we’ve been, we’ve been pleased and and fortunate to see that kind of coming together here recently, punctuated with the release of Gemini 3, uh, which is creating new capabilities, and then obviously the ramp of AI overviews, AI mode and and the Gemini app itself. And so, I think with Google having that distribution, we continue to like their potential to be to potentially be a, maybe not a a winner take all but potentially a winner take most type scenario, uh, and that’s kind of where we sit today. And obviously, there’s been a lot of news flow around this just even in the last couple of weeks and maybe some of the sort of course corrections if we can call it that that Open AI may be pursuing, hard to sort of know what’s entirely going on there. Um, but certainly we continue to to feel like Google is very, very well positioned, uh, from a consumer perspective.

02:08 Speaker A

Well, I, I mean, Google won the first one, meaning it won search, right? You could say it’s certainly the winner take most the vast majority of search. So at the same time, there were some challenges to it from a from a regulatory um, perspective. But what lessons do you think, um, that that Google can take away from that or Alphabet can take away from that to apply to this fight as well in terms of encouraging adoption?

02:51 Speaker B

Yeah, I mean, the the regulatory stuff is hard. I think at this stage where we’re still very, very early days in terms of adoption of these chatbot tools, you have to try and create the best product and and and uh best situation for users that you can. uh and and let the chips kind of fall where they may. I think, you know, we had flagged just yesterday Google’s uh VP, I believe of search had said, look, we want to create a scenario, we want to create a user experience where you don’t have to go searching for different things in different places. We we love that kind of a statement. We think that’s very, very compelling from user experience where people were still maybe using Google for facts and chat GPT for other types of things. So, I think they’re focused on building the best product. Could there be regulatory pressure down the road? Absolutely. uh, similar to what you just laid out with search, but at at this stage of the game, it’s it’s far too early, I think to to presume or or or discount that.

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