Meta Closes in on Google Ad Revenue as Wall Street Favors Alphabet

Meta's ad revenue has been gaining on Google's, narrowing the gap to $3.9 billion in Q2. Meta made $59.36 billion from ads, a 27% increase, while Alphabet generated $63.27 billion from 'Google Search & other', up 17%. Bernstein analyst Mark Shmulik notes that Meta has seen the largest impact from AI on ad growth and is on track to surpass Google Search this year.

A key reason for Alphabet's higher revenue is its spending on AI, which feeds into Google Cloud, generating $24.8 billion, an 82% increase. In contrast, Meta lacks a cloud segment, with infrastructure returns mostly coming through ads.

Despite the growing ad revenue, investors remain cautious about Meta's stock performance. Alphabet's cash flow has also been affected by Big Tech's squeeze, causing some to rotate towards Alphabet instead. TipRanks shows 38 buys and no sells for Alphabet, with an average target of $752.61.