So far this year, Alphabet has risen 32% and Meta has risen 44%.
According to Loop Capital analyst Rob Sanderson's latest research report,$Meta Platforms (META.US)$it is worth buying, but investors should wait and see for now.$Alphabet-A (GOOGL.US)$stocks for the past ten years.
In his research note on Tuesday, Sanderson wrote:"As the strategic development of artificial intelligence and the introduction of product work, we are becoming more and more optimistic about the prospects of Meta, while the prospects of Google still remain unclear." Sanderson rated Meta as a "buy" with a target price of $550 and rated Alphabet as a "hold" with a target price of $170.
There is no doubt that generative AI has swept the technology industry. Investors are closely watching which companies are investing in AI and what plans they are pursuing. Some people call this the AI arms race to maximize returns on investment. In terms of AI expenditures and projects, Meta and Alphabet are among the most watched stocks.
Sanderson pointed out,"Google seems to be busy defending its dominant search position, with traditional search query share slipping to Bing (though not at a dramatic pace but accelerating) and possibly more share slipping to generative AI alternatives like ChatGPT, Perplexity, and other substitutes." Google will also face competition from other AI search options, including Siri updated after Apple's iPhone, Alexa from Amazon, and MetaAI.
Google has long been the king of search engines. In order to maintain this position in a more competitive environment, the company launched Gemini (formerly known as Bard), its proprietary generative AI tool. But Sanderson and other Wall Street analysts worry that competition will have a negative impact on Google's market share.
As social media platforms like Snapchat and TikTok rise, investors are also paying attention to Meta's competitive landscape. However, Sanderson wrote:"Meta has maintained its dominant position and scale in social media for more than a decade."
He said:"Meta has proven to be an innovator and an effective rapid follower that can quickly correct the direction of product development in the face of competition and market dynamics (such as Stories, Reels, early AI investments). We believe the company is better suited and battle-tested, able to harness disruptive technology and ride major changes."
As of Wednesday's close, both Alphabet and Meta have risen slightly. Alphabet has risen 32% so far this year, while Meta has risen 44%.
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