Alphabet shares have recently underperformed, trading 30% below the S&P 500 due to concerns over AI disruption, potential loss of default search status on Apple devices, and legal challenges. Despite these fears, the company maintains a strong market share in online search and is diversifying into high-growth areas like Google Cloud and YouTube. With a robust net profit margin and a solid balance sheet, Alphabet is well-positioned to navigate these challenges and could see a bullish reversal if shares break above $170.