Alphabet (GOOGL) and Meta Platforms (META), two leading Magnificent 7 stocks, continue to gain attention on Wall Street ahead of earnings. Top TD Cowen analyst John Blackledge reiterated Buy ratings on both stocks, highlighting that generative AI is now a meaningful driver of growth across their core businesses.
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Alphabet: Cloud Strength and AI Are Driving Growth
Alphabet will report its first-quarter 2026 results on April 29. Ahead of the print, Blackledge raised his price target on Alphabet to $375 from $365, pointing to strong momentum in Cloud and steady growth in digital advertising.
The biggest driver is Cloud. The analyst expects revenue to grow about 50% year-over-year in Q1 2026, up from 48% growth in Q4 2025. This strength is coming from rising enterprise demand for AI tools, faster customer signups, and larger deal sizes.
At the same time, Alphabet’s Search business remains resilient. Following the launch of Gemini 3 in late 2025, the company has seen higher user engagement, with management noting that AI is now a “material driver” of Search. Features like AI Overviews and AI Mode are helping improve user interaction.
In terms of valuation, Alphabet shares are up about 7% year-to-date but still trade at around 28.3x P/E (excluding cash). The analyst sees this as reasonable given the company’s strong ad business, fast-growing Cloud segment, and emerging bets like Waymo.
Meta: Ad Growth Stays Strong amid Heavy AI Investment
Meanwhile, Meta will also report its first-quarter 2026 results on April 29. For Meta, Blackledge maintained a Buy rating and an $820 price target, as AI continues to improve engagement and ad performance across its platforms.
The analyst expects Meta to outperform Wall Street estimates, with Q1 2026 revenue expected to come in about 1% above consensus and operating income about 6% higher. This reflects stronger monetization driven by AI-powered content recommendations.
Looking ahead, investors are closely watching updates on Muse Spark, Meta’s latest large language model, which could further boost engagement across apps like Facebook and Instagram.
However, higher spending remains a key concern. Meta is ramping up investment in AI infrastructure, which is likely to pressure operating margins even as revenue growth improves. The company is also expected to provide more clarity on its 2026 capital spending and expense outlook in the coming quarters.
Which Mag 7 Stock Is the Better Buy?
According to TipRanks comparison tool, both Meta and Alphabet carry Strong Buy ratings from analysts, reflecting continued confidence in their AI-driven growth. Meta appears to offer higher upside, with an average price target of $855.46, implying about 26% upside from current levels. Meanwhile, Alphabet’s average price target of $385.97 indicates roughly 15% upside.
Overall, both stocks remain well-positioned, but Meta stands out for its relatively stronger near-term return potential.
The Bottom Line
Alphabet and Meta are showing that AI is no longer just a long-term story. While Alphabet is benefiting from Cloud acceleration and stable Search growth, Meta is seeing stronger ad revenue from better engagement. Even so, rising AI spending remains an important factor to watch for both companies.