Dan Niles Bullish on Alphabet and Meta Amid AI Growth
Dan Niles, founder of Niles Investment Management, remains bullish on Alphabet and Meta Platforms, citing strong growth in Google Cloud and the launch of Meta’s Muse AI agent. Google Cloud revenue surged 82% to $24.8 billion in the second quarter, marking the fastest acceleration among major cloud providers like Microsoft and Amazon. Meanwhile, Meta’s Muse AI agent, which browses the web and completes tasks for users, has surpassed ChatGPT in the App Store rankings since its September 8 launch.
Niles initially highlighted Meta’s potential on September 7 when its stock was down about 7% year-to-date. Despite the recent stock price spike, he still sees momentum, supported by JPMorgan’s upgraded price target from $820 to $920. He suggests that Meta’s next monetization opportunity could be a cloud arm, though he views the stock as less attractive now due to its run-up.
Alphabet’s cloud backlog, representing signed customer commitments, hit $514 billion in June. However, Niles cautions that Google lacks a competing AI agent, while OpenAI has already launched its Dots agent. He advises investors to monitor search revenue data closely to ensure no underlying issues arise from AI disruptions.