03:44 PM EDT, 09/25/2024 (MT Newswires) -- Alphabet's (GOOG) Google ( GOOG ) faces uncertainty around its search business, with investors now factoring in a possible loss of exclusivity with Apple ( AAPL ) , Oppenheimer said in a note emailed Wednesday.

"Google ( GOOG ) generates 31% of gross search revenue ($61B) via Apple ( AAPL ) devices and pays 36% to Apple ( AAPL ) for exclusivity, resulting in 19% of net ad exposure," Oppenheimer said. However, Google ( GOOG ) would need to retain only 65% of Apple ( AAPL ) search activity if there were no traffic acquisition cost payment, or 75% if the TAC decreases to 15%, it added.

This could cap price-to-equity ration at 20, the brokerage said in the note.

However, a survey showed that 75% users would go for Google ( GOOG ) if they had to pick a default search, and if Apple ( AAPL ) removed Google ( GOOG ) from default search, 78% would download Chrome, Oppenheimer said.

The US Department of Justice's case against Google's ( GOOG ) Adtech unit is also a headwind which could translate to under 2% of its equity value. Google's ( GOOG ) offer to spin off its ad business was denied by European regulators. It is now proposing to lower take-rate from publishers in ad tech to 5% to settle with the DOJ, Oppenheimer said.

Oppenheimer lowered its price target for Alphabet to $185 from $210 with an outperform rating.

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