{"id":17884,"date":"2023-06-04T01:34:08","date_gmt":"2023-06-04T05:34:08","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/opinion-alphabet-stock-is-a-better-bet-than-meta-platforms-to-ride-the-ai-wave\/"},"modified":"2023-06-04T01:34:09","modified_gmt":"2023-06-04T05:34:09","slug":"opinion-alphabet-stock-is-a-better-bet-than-meta-platforms-to-ride-the-ai-wave","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=17884","title":{"rendered":"Opinion: Alphabet stock is a better bet than Meta Platforms to ride the AI wave"},"content":{"rendered":"
\n

With shares more than doubling this year, Meta Platforms
\n META,
\n <\/bg-quote>
\n seems to be a stock that just won\u2019t quit. But given the choice, investors may want to consider digital-advertising competitor Alphabet
\n GOOGL,
\n +0.77%<\/bg-quote><\/p>\n

GOOG,
\n +0.69%<\/bg-quote>
\n instead.<\/p>\n

Sure, Facebook parent Meta Platforms topped earnings expectations and posted bullish guidance.\u00a0Yet just after celebrating those results, investors were met with a $1.3 billion fine against Meta from the European Union over data privacy.<\/p>\n

\n

Google parent Alphabet Inc. shares are up about 40% on the year. Even though earnings weren\u2019t quite as big news on Wall Street, the report offered encouragement. In fact, a closer examination shows why this stock might be a better investment than Meta right now. Here are the important points if you\u2019re weighing these digital advertising giants against each other \u2014 and why my bet is on Alphabet. <\/p>\n

Google ads dominate, and is closer to transactions:<\/strong>\u00a0 According to Insider Intelligence, Meta\u2019s global digital ad market share is 20.1%, behind Google\u2019s 28.4% of share. But more importantly, Google\u2019s mix is more favorable right now. A recent report in advertising industry publication Digiday, shows that there\u2019s an increasing trend towards \u201cretail media\u201d that targets shoppers at or near their transactions \u2013 often to get them to pick Brand A over Brand B. That intuitively makes sense in a tougher spending environment where there\u2019s less dollars to go around, and will benefit Alphabet or even smaller competitor Amazon.com
\n AMZN,
\n +1.21%<\/bg-quote>,<\/span>
\n with 7.5% of the global ad market, more than it will Meta.<\/p>\n

Alphabet is more diversified:<\/strong> While advertising is still the big driver of Alphabet, its year-end report showed that in 2022 it generated $59.0 billion from Google ads \u2014 then $8.8 billion from \u201cother\u201d Google services including its Play app store and hardware like Fitbit, Nest and Pixel devices. On top of that, it also snagged $7.3 billion from its fast-growing Google Cloud arm. <\/p>\n

Meanwhile, Meta\u2019s financials only include a nebulous \u201cnon-advertising revenue\u201d category for Oculus VR headsets and developer fees and that line item was less than $3 billion for all of 2022. In other words \u2014 if that core ad biz does take a hit, Facebook and Meta will be hit harder.<\/p>\n

Meta is late to AI:<\/strong> While CEO Mark Zuckerberg has made great pains lately to play up Meta\u2019s interest in AI, the fact of the matter is that a big reason this stock cratered over the last few years was a boondoggle in a different area of tech \u2014 the metaverse, for which the company takes its name. <\/p>\n

In fact, Meta shares are down about 30% from their 2021 high because the company was punished so badly for its missteps. Meanwhile, Alphabet has been quietly investing in AI for years. Back in 2022, it acquired a ChatGPT rival named Anthropic before we even knew what ChatGPT was. Then, way back in 2014, it acquired an AI startup named DeepMind \u2014 with a string of other acquisitions in between. <\/p>\n

In other words, if you want a company that has been thinking seriously about AI for years rather than playing with cartoonish avatars and showing up late to the party, Alphabet is the way to go.<\/p>\n

Tiktok\/Twitter troubles doesn\u2019t equal FB\/Insta growth:<\/strong> With Meta\u2019s dependence on social advertising, it\u2019s clear the company lives and dies on this business. But just for the record, if you think that\u2019s ultimately a good thing because a Tiktok ban (even if such a thing is possible) means a ton of refugees move to Facebook and Instagram, you should think again. Same for older folks upset with some of the changes on Twitter Inc. lately. If users get turned off, it seems more likely some upstart alternative will benefit \u2014 much like Tiktok or Snapchat did in prior years \u2014 rather than the exodus resulting in a return to Facebook.\u00a0<\/p>\n

Alphabet has momentum, too:<\/strong> As previously mentioned, Meta has been on an absolute tear lately. But a closer look reveals Alphabet may be the stock that really hits its stride this summer. Though investors didn\u2019t see the instant pop after earnings, Alphabet has gone on to gain amore than 20% in the past 30 days \u2014 even amid serious headline risk around the U.S. debt ceiling and other macro issues. Meta, meanwhile, is basically flat over that period, hinting that new money may not be as happy as investors who bought in several weeks or months ago. As for valuation, Alphabet is trading for a slightly lower price-to-sales ratio and price-to-earnings ratio right now \u2014 hinting there\u2019s more room to run.<\/p>\n

You should always do your own research, as your outlook on both Alphabet and Meta Platforms may differ based on your personal investing goals and risk tolerance. But generally, if you\u2019re looking to buy one or the other right now, my money is on Alphabet.\u00a0<\/p>\n

More:<\/strong>\u00a0<\/strong>Nvidia and other tech plays are overpriced. Here\u2019s where you\u2019ll find the next big-money stocks.<\/strong><\/p>\n

Also read: <\/strong>Technically speaking, a new bull market started last October. Buy on weakness.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

With shares more than doubling this year, Meta Platforms META, seems to be a stock that just won\u2019t quit. But given the choice, investors may want to consider digital-advertising competitor Alphabet GOOGL, +0.77% GOOG, +0.69% instead. Sure, Facebook parent Meta Platforms topped earnings expectations and posted bullish guidance.\u00a0Yet just after celebrating those results, investors were […]<\/p>\n","protected":false},"author":1,"featured_media":17885,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-17884","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nOpinion: Alphabet stock is a better bet than Meta Platforms to ride the AI wave | iFintechWorld<\/title>\n<meta name=\"description\" content=\"With shares more than doubling this year, Meta Platforms META, seems to be a stock that just won\u2019t quit. 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