Amazon Gains Momentum as Meta Falls Short
Meta Platforms' stock is not currently considered a top pick by investment analysts. Despite its rapid growth and enhanced ad effectiveness due to artificial intelligence, the company's financial results may not receive a significant boost from AI. In contrast, Amazon is benefiting significantly from the AI boom and has multiple needle-moving businesses working in its favor.
Meta's Family of Apps ad revenue rose 27% year-over-year in the second quarter of fiscal 2026 to $59.4 billion, with ad impressions increasing by 14% YOY. However, this growth may be limited due to other major players also using AI to enhance their ad capabilities.
Like Amazon, Meta's free cash flow declined sharply year-over-year in Q2 due to significant investments in AI. However, unlike Amazon, Google, and Microsoft, Meta is not yet selling AI infrastructure to rapidly growing AI model makers, although it is developing Meta Compute.
Meta lacks other businesses that are likely to boom in the near-to-medium term, with its AI-chip business just getting off the ground and facing competition from established firms. Investment bank Truist predicts that Meta's new subscription business could attract 360 million users and $20 billion of sales by 2030, but this is uncertain.