Alphabet vs. Meta Platforms: Which AI Stock Will Make You Richer?
Key Points
With their massive user bases, powerful network effects, and huge profits, it’s hard not to appreciate how dominant these two companies are.
Meta trades at a slight discount to Alphabet on a forward price-to-earnings basis.
- 10 stocks we like better than Alphabet ›
Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) and Meta Platforms (NASDAQ: META) each have a dominant position in the technology sector and global economy. Combined, they're planning $338 billion in capital expenditures (at the midpoint) in 2026 to bolster their already strong competitive standings in the age of artificial intelligence (AI).
Which of these two AI stocks will make you richer?
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These companies have enormous user bases, measured in billions, indicating ubiquitous adoption. Their business models benefit from powerful network effects that improve over time.
And they generate massive profits. Alphabet's Q2 operating margin of 34% was higher than Meta's 31%.
As mentioned, both companies are going all-in on AI, allocating significant financial resources to build data centers. Alphabet is leaning on its Google Cloud segment, which posted unbelievable revenue growth of 82% in the last quarter, to monetize these investments. Meta is using AI not only to boost engagement and ad capabilities, but to develop new products and services.
It's difficult to pick just one of these stocks. On a forward price-to-earnings basis, Meta is cheaper than Alphabet just by a hair. So, if your valuation filter is stringent, the social media stock wins.
However, I see no reason why investors can't buy and hold both stocks for adequate AI exposure. They're poised to continue their long-term winning streaks.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, consider this:
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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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