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Alphabet GOOGL and Apple AAPL are the two most well-known providers of consumer apps marketplaces through Google Pay Store and Apple App Store, respectively. The companies are taking initiatives to infuse artificial intelligence (AI) into their consumer-centric offerings to expand their user base and boost market share.
Unlike enterprises and businesses, individual consumers have been much cautious to adopt AI and generative AI (Gen AI) into their daily lifestyle and routines. Per a Bain & Company December 2024 survey, only 35% of U.S. consumers used Gen AI in comparison to 95% of U.S. and European companies. Concerns around privacy, accuracy and data security have hindered proliferation among individual consumers.
However, the scenario seems to have changed in the past six months of 2025. As per a latest report by Menlo Ventures, almost 61% of U.S. adults (survey sample of more than 5,000 U.S. adults) have used AI over the past six months, and nearly 19% have made it a habit to use it on a daily basis. Although monetization remains weak (only 3% paying for premium services among an estimated user base of 1.8 billion), the growing infusion of AI tools into consumer lifestyle that makes users complete their daily routine in a better, faster and cheaper way is expected to boost spending.
According to the New Minds, New Markets study by Cognizant in collaboration with Oxford Economics, the 18–44-year-old AI enthusiasts will “command an estimated $4.4 trillion of AI-influenced consumer spending in the U.S. by 2030,” driven by a rise in income and purchasing power. For the United Kingdom, Australia and Germany, the projection stands at $690 billion, $669 billion, and $539 billion, respectively. Alphabet and Apple are well-poised to cultivate this huge opportunity.
Nevertheless, GOOGL or AAPL, which has an edge under the current scenario?
Alphabet’s open and cloud-centric approach has been driving the popularity of its applications among consumers. In first-quarter 2025, Alphabet surpassed 270 million paid subscriptions with YouTube and Google One as key drivers. Google Assistant, now called Gemini, is the #2-ranked general AI assistant in terms of usage (23% share) among all U.S. adults as per Menlo Ventures’ survey, beating Apple Siri, which is in the #5 position (16% share).
Alphabet’s initiatives to deploy AI and infuse AI in Search are driving top-line growth. Search revenues are driven by improving engagement with features like AI Overview, which now has 1.5 billion users per month and is available in more than 15 languages across 140 countries. The addition of AI mode expands AI Overview’s advanced reasoning, thinking and multimodal capabilities. Advancements in the latest Gemini models are helping Alphabet to upgrade AI Overviews with easier-to-read responses, breaking down key information and incorporating more visuals directly into responses.
Circle to Search is driving additional Search and is gaining popularity among younger users. Circle to Search, which is currently available on more than 300 million Android devices, is expected to gain further popularity with the addition of AI Mode. Circle to Search can now be used to get instant help during gaming on mobile.
Apple is seeing better iPhone 16 sales in regions where Apple Intelligence is available. Apple expanded the availability of Apple Intelligence with iOS 18.4, iPadOS 18.4, and macOS Sequoia 15.4 updates in new languages, including French, German, Italian, Portuguese (Brazil), Spanish, Japanese, Korean, and Chinese (simplified) — as well as localized English for Singapore and India — and are accessible in nearly all regions around the world. At the end of 2025, Apple Intelligence will be available in eight more languages: Danish, Dutch, Norwegian, Portuguese, Swedish, Turkish, Chinese (traditional) and Vietnamese.
New Apple Intelligence features, such as Live Translation, updates to visual intelligence, as well as enhancements to Image Playground and Genmoji, are noteworthy. Shortcuts can access Apple Intelligence directly. Apple Intelligence is now getting added to Apple Wallet, and users can make purchases with Apple Pay.
However, Apple Intelligence continues to lag the “WoW” factor, which has been a concern. Delayed and staggered launches are other concerns.
The Zacks Consensus Estimate for GOOGL’s 2025 earnings is pegged at $9.56 per share, up 3 cents over the past 60 days, indicating an 18.91% increase over 2024’s reported figure.
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
The consensus mark for Apple’s fiscal 2025 earnings has declined by a penny to $7.10 per share over the past 60 days, suggesting 5.19% growth over fiscal 2024.
Apple Inc. price-consensus-chart | Apple Inc. Quote
Shares of Alphabet and Apple have suffered from challenging macroeconomic conditions, volatility related to higher tariffs and increasing regulatory concerns. Year to date, GOOGL shares have lost 3.3%, outperforming Apple’s decline of 16%.
In terms of forward 12-month Price/Sales (P/S), Apple shares are trading at 7.52X, higher than Alphabet’s 6.41X.
While Apple has a Value Score of D, Alphabet carries a Value Score of C, suggesting both shares are overvalued.
Alphabet is benefiting from the growing popularity of Gemini, AI Overview and Circle to Search among consumers. Continuous innovation across search, productivity and developer tools is a key catalyst for Alphabet. In comparison, Apple is still playing a catch-up role with Apple Intelligence.
Currently, Alphabet has a Zacks Rank #2 (Buy), making the stock a stronger pick compared with Apple, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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