Amazon Surpasses Meta as Top Investment Choice Amid AI Boom

Meta Platforms (META) has been experiencing rapid growth in its ad business, with Family of Apps ad revenue soaring to $59.4 billion in Q2, a 27% increase from the same period last year. This boost is largely due to the advanced targeting enabled by artificial intelligence (AI), which makes ads more effective.

However, despite this growth, Meta's financial results are unlikely to get a significant boost from AI in the long term. The company lacks leverage to the AI boom, unlike Amazon (AMZN) and other major players in the industry. Furthermore, Meta does not have any imminent positive catalysts on the way, making it a less attractive investment option.

In contrast, Amazon is benefiting greatly from the AI boom, with its Amazon Web Services (AWS) revenue jumping 37% year-over-year in Q2. The company's recent alliance with AI startup Anthropic has also contributed to this growth. Additionally, Amazon has multiple needle-moving businesses working for it, including its nascent satellite internet service and pharmacy business.

Given these factors, Amazon appears to be a better bet than Meta right now. While Meta's ad business is vulnerable to a potential drop in consumer spending due to high oil prices and tariffs, Amazon's diversified portfolio makes it less susceptible to such risks.