Alphabet vs. Meta Platforms: Is One the Better Long-Term Play?
Key Points
Both of these tech stocks trade at reasonable forward price-to-earnings ratios.
The ongoing growth of digital advertising will propel revenue and profit.
- 10 stocks we like better than Meta Platforms ›
Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) and Meta Platforms (NASDAQ: META) dominate the tech landscape, and their products and services have billions of users. They're investing aggressively in artificial intelligence (AI) capabilities, and it's hard to argue with their remarkable financial successes.
It's no surprise that shares in each of these two businesses have performed well over the past decade. But which of these "Magnificent Seven" stocks is the better long-term play? Is one better than the other?
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Image source: Alphabet.
It's hard to pick just one
There's no reason investors can't own both of these companies in their portfolios, with the intention of holding them for at least the next five years. Alphabet shares trade at a forward price-to-earnings ratio (P/E) of 28, while Meta's valuation is cheaper at a multiple of 22 bases on estimates. These valuations are extremely reasonable for two of the most outstanding businesses in the universe.
These are two digital advertising juggernauts
During Q3 2025 (ended Sept. 30), Alphabet and Meta generated $74 billion and $50 billion, respectively, in digital ad revenue. This puts them atop the industry on a global level. And with the help of more robust AI tools that can help advertisers better target users, this market is expected to continue growing.
That provides a favorable backdrop for the revenue and profits of these companies to keep rising at strong rates. This should drive returns for shareholders and I think both make great long-term investments.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Meta Platforms. The Motley Fool has a disclosure policy.
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