Bernstein’s top analyst, Mark Shmulik, highlighted his “Top Consumer AI Play” between Meta Platforms (META) and Alphabet (GOOGL). Shmulik reiterated his “Buy” rating on META stock, while keeping his “Hold” rating on GOOGL. He has a $900 price target on META, implying 21.8% upside potential. At the same time, he raised GOOGL’s price target from $185 to $210, implying 1.4% downside potential.
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Shmulik is a five-star analyst on TipRanks, ranking #315 out of 10,004 analysts tracked. He boasts a 79% success rate and an average return per rating of 28.20%.
Bernstein Highlights the Potential Digital Ad Winner
Shmulik highlighted Meta’s massive AI investments and its robust AI efforts. He believes META is the only consumer AI play that is actually delivering results and whose “core AI gains continue.”
He also noted that both impressions and price growth were strong, driven by AI initiatives that enhanced consumer engagement and improved advertiser effectiveness. In North America, Meta’s impression growth accelerated to 9% year over year, driven by AI-powered features that enhanced user engagement.
On the other hand, Google recorded a 4% year-over-year increase in paid clicks, up from 2% in the previous quarter, which Shmulik noted has temporarily eased concerns about AI-driven disruption, at least for now.
Meta Is Poised to Capture a Higher Digital Ad Market Share
Notably, Meta raised its fiscal 2025 capex by up to $2 billion, while its fiscal 2026 capex is forecasted to reach $100 billion, up $30 billion compared to FY25.
Furthermore, Shmulik believes that Meta currently has a roughly 27% share in the digital advertising market and is bound to catch up to Google’s Ad revenue business by the end of 2026. This was evident from the fact that rival Google’s Q2 results were less about its modest beat and more about “how impressive Meta’s ad performance was.”
Shmulik added that in Europe, Meta and its peers, Pinterest (PINS), and Reddit (RDDT) all showed strong advertising results. However, in the Asia-Pacific (APAC) region, advertisers reduced their spending on U.S. ads due to tariffs and trade issues. Despite this, Shmulik noted that overall APAC ad spending was higher compared to the previous quarter when looking at global ad placements.
He also stated that investors are becoming more interested in internet companies again because of strong digital ad results. Meta is leading this trend, with “social” platforms seen as likely winners in AI as they capture more of people’s free time.
META vs. GOOGL: Which Is the Better Tech Stock?
We used the TipRanks Stock Comparison Tool to determine which of the two tech stocks is currently favored by analysts. On TipRanks, Wall Street has assigned a “Strong Buy” consensus rating, with an 18.1% upside potential in the next twelve months.
