Ubuntu uses the local systemd-resolved DNS resolver by default.

/etc/resolv.conf being a symlink pointing to /run/systemd/resolve/stub-
resolv.conf is the correct default setting. It will redirect any DNS
request to sd-resolved's local resolver at 127.0.0.53.

This has the benefit of local caching and per-interface DNS configuration via 
sd-resolved.
Switching the symlink to /etc/resolv.conf -> /run/systemd/resolve/resolv.conf 
would make sd-resolved display the upstream DNS servers directly into the file, 
kind of a legacy/compatibility mode, loosing all the benefits of a local 
resolver. This is NOT recommended.

You can manually configure your DNS settings via netplan.io or sd-
resolved directly, as stated in comment #13. NetworkManager should
automatically detect sd-resolved and integrate nicely, some other
(legacy) tools might not integrate as nicely.

If DNS is not working for you, you can configure a fallback, e.g. Google
DNS:

$ cat /etc/systemd/resolved.conf.d/fallback_dns.conf
[Resolve]
FallbackDNS=8.8.8.8 2001:4860:4860::8888

I'm marking this bug as "Invalid". Please keep your symlink as
/etc/resolv.conf -> /run/systemd/resolve/stub-resolv.conf

** Changed in: systemd (Ubuntu)
       Status: Confirmed => Invalid

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https://bugs.launchpad.net/bugs/1774632

Title:
  The symbolic link /etc/resolv.conf points to the wrong file by default

Status in systemd package in Ubuntu:
  Invalid

Bug description:
  When using nslookup for local machine names, the local DNS was being
  ignored (not queried) and none of the local machines could be found.

  After much research and digging, it was discovered that the cause was
  the incorrect symbolic link /etc/resolv.conf file.

  The default install caused systemd-resolve to configure the link to point to 
the stub file:
  /etc/resolv.conf -> ../run/systemd/resolve/stub-resolv.conf

  Reomving that link and pointing it to the correct file solved the DNS lookup 
issue. The correct link looks like this:
  /etc/resolv.conf -> /run/systemd/resolve/resolv.conf

  
  Steps used to test the bug before fixing the link is to perform an nslookup 
on a local (non FQDN) machine that is in your local DNS (my router is my DNS 
server for this case) Here is an example of the incorrect output:

  $ nslookup web1

  Server:     127.0.0.53
  Address:    127.0.0.53#53

  ** server can't find web1: SERVFAIL

  
  Switching the symbolic link solves the problem. Here is my solution:

  $ sudo rm -f /etc/resolv.conf
  $ sudo ln -s /run/systemd/resolve/resolv.conf /etc/resolv.conf

  
  After switching the symbolic link, the nslookup functions properly.

  $ nslookup web1

  Server:     192.168.1.1
  Address:    192.168.1.1#53

  Name:   web1
  Address: 192.168.1.107

  ProblemType: Bug
  DistroRelease: Ubuntu 18.04
  Package: systemd 237-3ubuntu10
  ProcVersionSignature: Ubuntu 4.15.0-22.24-generic 4.15.17
  Uname: Linux 4.15.0-22-generic x86_64
  ApportVersion: 2.20.9-0ubuntu7
  Architecture: amd64
  CurrentDesktop: ubuntu:GNOME
  Date: Fri Jun  1 05:28:41 2018
  InstallationDate: Installed on 2018-01-20 (131 days ago)
  InstallationMedia: Ubuntu 17.10 "Artful Aardvark" - Release amd64 (20180105.1)
  MachineType: Dell Inc. Inspiron 5755
  ProcEnviron:
   TERM=xterm-256color
   PATH=(custom, no user)
   XDG_RUNTIME_DIR=<set>
   LANG=en_US.UTF-8
   SHELL=/bin/bash
  ProcKernelCmdLine: BOOT_IMAGE=/boot/vmlinuz-4.15.0-22-generic 
root=UUID=7fe151d3-4033-4903-b356-341d9f16e124 ro acpi=force
  SourcePackage: systemd
  UpgradeStatus: Upgraded to bionic on 2018-04-28 (33 days ago)
  dmi.bios.date: 08/27/2015
  dmi.bios.vendor: Dell Inc.
  dmi.bios.version: A08
  dmi.board.name: 0VY15F
  dmi.board.vendor: Dell Inc.
  dmi.board.version: A00
  dmi.chassis.type: 8
  dmi.chassis.vendor: Dell Inc.
  dmi.chassis.version: A08
  dmi.modalias: 
dmi:bvnDellInc.:bvrA08:bd08/27/2015:svnDellInc.:pnInspiron5755:pvrA08:rvnDellInc.:rn0VY15F:rvrA00:cvnDellInc.:ct8:cvrA08:
  dmi.product.name: Inspiron 5755
  dmi.product.version: A08
  dmi.sys.vendor: Dell Inc.

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