From Nasdaq: 2025-06-19 12:12:00

Meta Platforms and Alphabet continue to dominate the digital advertising market, with Meta Platforms reporting a 16.2% increase in advertising revenues to $42.3 billion in Q1 2025, and Alphabet reporting revenues of $66.9 billion, driven by Search and YouTube ad growth. Both companies are expected to hit revenues of $209.15 billion and $183.8 billion, respectively, despite potential tariff impacts on digital ad spending in 2025.

Meta Platforms’ focus on AI-driven ad recommendations and user engagement is boosting ad revenues, with initiatives like the Generative Ads Recommendation model and increased usage of AI creative tools. The integration of AI across its platforms is driving engagement and personalized responses, expected to lead to an 11.9% revenue growth in 2025.

Alphabet is leveraging AI innovations in Search and user engagement, with initiatives like AI mode and Circle to Search driving growth. Despite regulatory challenges, Alphabet’s Google Advertising revenues are projected to increase 6.6% in 2025, with Search & other segments growing 8.2% and YouTube Ads by 5%.

The Zacks Consensus Estimate for Meta Platforms’ 2025 earnings is $25.25 per share, up by 5.83% over 2024, while Alphabet’s earnings estimate is steady at $9.51 per share, suggesting 18.28% growth. Both companies have consistently beaten earnings estimates, with Meta Platforms showing a higher average surprise of 17.3%.

In terms of valuation, Meta Platforms shares are trading at a higher forward 12-month Price/Sales ratio of 8.89X compared to Alphabet’s 6.13X. Despite both stocks being overvalued, Meta Platforms has a slight edge over Alphabet in the near term, given its initiatives to boost top-line growth and improve user engagement.

Investors can access Zacks’ portfolio services for $1 to explore stock picks like Surprise Trader, Stocks Under $10, and Technology Innovators, which closed 256 positions with double- and triple-digit gains in 2024. While both stocks have a Zacks Rank #3 (Hold), Meta Platforms may have a slight advantage over Alphabet in the current market landscape.



Read more at Nasdaq: Meta Platforms vs. Alphabet: Which Digital Ad Behemoth Has an Edge?