AI search battlefield changes: Gemini's traffic surged by 24% month-on-month in December, while ChatGPT declined by 9%

The competitive landscape of the AI search market is undergoing significant changes.

According to the Chase Wind Trading Desk, a recent report from Bank of America Merrill Lynch cites statistics from the third-party organization Similarweb, stating that in December, Gemini's global daily average web visits surged by 24% month-on-month, while ChatGPT's visits decreased by 9% month-on-month.

Bank of America analyst Justin Post pointed out in the report that the slowdown in ChatGPT's traffic growth may be related to Google's launch of the "AI Overviews" feature and the increasing popularity of Gemini. The analyst believes that as more Google searches are presented in a native AI format, Wall Street may be underestimating the potential upside of Google's search business in 2026, maintaining a "Buy" rating on Alphabet.

Traffic Differentiation: Gemini increased by 24% month-on-month, ChatGPT decreased by 9%

Global data for December shows that, according to Similarweb statistics, Google's daily average web visits increased by 1% year-on-year to 2.7 billion, ChatGPT increased by 49% year-on-year to 178 million, Bing decreased by 9% to 110 million, and Gemini skyrocketed by 567% year-on-year to 56 million.

From the month-on-month data, Google decreased by 1.0%, ChatGPT decreased by 9.0%, Bing decreased by 2.1%, while Gemini increased by 24.2%.

In the U.S. market, Google's daily average traffic remained flat year-on-year at 531 million, ChatGPT increased by 86% year-on-year to 31 million (equivalent to 6% of Google), and Bing decreased by 0.5% year-on-year to 44 million. Month-on-month, Google remained flat, ChatGPT decreased by 8%, Bing remained flat, and Gemini increased by 24%.

Mobile Daily Active Users: Gemini increased by 17% month-on-month, ChatGPT increased by 2%

According to Sensor Tower data, in December, Google's global mobile daily active users increased by 12% year-on-year (1% month-on-month) to 2.1 billion, ChatGPT's daily active users increased by 262% year-on-year to 392 million (2% month-on-month), Bing decreased by 9% year-on-year to 5 million, Gemini increased by 351% year-on-year to 62 million (17% month-on-month), Perplexity increased by 341% to 10 million, and Grok had 9 million.

In December, Gemini added 9 million global daily active users, ChatGPT added 6 million, and Grok added 1 million, reflecting that AI features continue to drive growth in mobile usage, with Gemini showing relatively strong performance recently Despite the emergence of numerous AI applications, Google's position in the core search market has not been substantially shaken; rather, it has been consolidated. According to Statcounter, in December, Google's global search market share increased by 84 basis points month-on-month and by 110 basis points year-on-year, reaching 90.8%.

Challenges from Emerging AI Platforms

Apart from ChatGPT, other emerging large language model (LLM) platforms, although growing rapidly, still remain relatively small in scale.

Perplexity.ai saw a year-on-year increase of 92% in global traffic to 6 million in December, but a month-on-month decrease of 8%; Claude.ai grew by 134% year-on-year to 6 million, with a month-on-month decrease of 6%. Grok, owned by Musk, performed relatively well, with an 11% month-on-month increase to 9 million.

A report from Bank of America noted that the combined global daily traffic of these emerging AI sites is still less than 1% of Google's 2.7 billion daily visits. In terms of app downloads, the gap between Google and its competitors remains vast. In December, the global download volume of Google's app was 9.8 times that of Bing and 1.9 times that of Perplexity.

Optimistic about Gemini's Appeal and Upside Potential in Search Business

Bank of America maintains a "Buy" rating on Alphabet, setting a target price of $335.

Bank of America believes that data indicates the appeal of the Gemini 3.0 large model is continuously driving traffic and app downloads. As the proportion of AI-native formats in Google Search continues to rise, higher user engagement and improved conversion rates are expected to drive the monetization capability of the search business beyond market expectations by 2026.

From a valuation perspective, Alphabet's current trading price is about 24 times the estimated GAAP EPS for 2027, slightly above the average level of 22 times since 2016. Bank of America considers this valuation level reasonable, given its double-digit revenue growth expectations, expanding cloud business margins, and strong AI assets