Google-parent Alphabet was climbing early on Thursday after the search company denied artificial intelligence was eating into its market. It's a claim that leaves Google at odds with its partner Apple.

Alphabet stock was up 1.4% in early trading. That looks set to partially recoup a 7.3% drop the previous day, triggered after an Apple executive testified in a Department of Justice lawsuit against Google that searches in the iPhone maker's browsers fell for the first time in April amid the growth in AI use.

"We continue to see overall query growth in Search. That includes an increase in total queries coming from Apple's devices and platforms," Google said in a blog post on Wednesday.

It's not clear how Apple and Google are measuring search volumes, although Google did note in its blog post that voice and visual searches were contributing to its growth.

Apple and Google both have mixed incentives when it comes to measuring the threat from AI to traditional search.

While Google is looking to convince the market that the technology isn't undermining its core business, it is also resisting the Justice Department's efforts to break up the company following a federal judge's ruling last year that it has an illegal monopoly over online search.

A competitive threat from AI could help Google's case. It could also be useful for Apple to defend an arrangement under which it receives an undisclosed percentage of Google's ad revenue from searches on its devices. The arrangement led to a $20 billion payment from Google to Apple in 2022, according to court filings.

"Apple... has incentive for Google to appear weaker in search, while also emphasizing increased search competition and the significant impact to Apple's business," J.P. Morgan analyst Doug Anmuth said in a note Thursday. He added that the selloff in Alphabet stock looks "overdone" and kept an Overweight rating and $195 target price on the shares.

Apple is looking at adding AI search providers, including OpenAI and Perplexity AI, as search options on its devices in the future, according to its testimony on Wednesday.

Apple didn't immediately respond to a request for comment early on Thursday. News Corp, the owner of Barron's publisher Dow Jones, has sued Perplexity AI alleging copyright infringement. News Corp also signed a multi-year partnership with OpenAI in March 2024.

Google is walking a fine line as it integrates AI into its technology while looking to maintain its search dominance. The company said in its well-received recent earnings that its 'AI Overviews' -- AI-generated summaries to search queries -- generate approximately the same amount of revenue as non-AI searches.

"We still think it's unlikely that Google's chatbot offering (via AI Overviews and upcoming AI Mode, as well as the standalone Gemini app) will garner similar query share compared to its traditional search market share (90%). Overall, however, Alphabet still has excellent GenAI technology," wrote TD Cowen analyst John Blackledge.