Insider Monkey favors Meta over Alphabet as the stronger AI-advertising stock pick: Meta trades near 23 times forward earnings versus Alphabet’s 25 and posted 28% second-quarter revenue growth versus Alphabet’s 24%; its edge depends on containing spending.
Alphabet reported second-quarter revenue of $119.8 billion, up 24%; Google Search & other rose 17%, while Google Cloud revenue jumped 82% to $24.8 billion and its backlog reached $514 billion. The analysis sees Cloud as a second profit engine and cites Gemini in Search and Workspace, TPUs sold or rented through Cloud, and advertising as AI-monetization routes. It warns AI assistants could disrupt traditional Search, while regulation targets Google’s distribution advantages.
Meta’s AI already improves recommendations, engagement and ad targeting across Facebook and Instagram, while Muse’s subscriptions, commerce and agentic services are more speculative, the article says. In Q2, Meta’s operating margin fell to 31% from 43% as total expenses rose 55%, including $2.4 billion in legal charges and $1.18 billion in severance. The analysis says Meta must generate enough added advertising and AI revenue to cover higher depreciation, talent and compute costs.
