In the battle of the tech giants, Wall Street’s Bernstein is favoring Metaplatform over Alphabet. Bernstein commented Thursday on the news that Meta has become a “set-it-and-forget-it blue chip stock” to replace Google’s parent company, given the social media company’s core advertising business and strengths in monetizing artificial intelligence. stated in a note to customers. . Analysts raised Meta’s price target to $675 per share from $600 and maintained an outperform buy rating on the stock. The new PT suggests an increase of nearly 20% from Wednesday’s closing price. Bernstein acknowledged that Meta and Alphabet’s valuations are “marginal” at the moment. However, analysts believe that Meta’s risks and rewards are “balanced” both in the short and long term. They said the launch of advertising on Threads, revenue on Reels, and a possible ban on TikTok in the US will all have a positive impact on revenue. It also highlights Meta’s competitive edge in AI, which provides users with content recommendations, ad automation and placement, and creative tools. These differentiators provide Meta with a “long path to growth beyond the digital market,” they added. Bernstein said the bullish-versus-bearish debate after the first quarter results was “mostly resolved” after the second quarter’s results and strong outlook for the third quarter. Analysts also said the slowdown in advertising spending by Chinese companies, primarily online retailers Tem and Shein, was not overly worrying. The big picture Bernstein’s bullish assessment of Meta’s future growth prospects comes as the stock has significantly outperformed both the broader market and Alphabet. Meta stock is up nearly 60% year-to-date, compared to the S&P 500’s more than 21% rise and Google’s parent company’s 16% rise in 2024. , Meta’s closing price on Tuesday was just 2% off its record closing price of $595.94 on October 4th. The stock was stable at around $564 on Thursday, roughly around the club’s price target of $560. Considering this year’s bull market, we currently have a rating of 2 for the stock. Conclusion Like Bernstein, we are very happy with Meta. The social media giant has cemented itself as a one-stop shop for advertisers worldwide. At the club’s October meeting last week, Meta was excited to see another turnaround in its advertising business after Adobe announced new AI-powered video tools for marketing. Adobe’s service is seen as good news for digital platforms like Facebook and Instagram, as it makes content creation easier for businesses looking to advertise. As for Alphabet, Jim Cramer ranks it among the “Magnificent Seven” stocks, given the potential for continued antitrust headwinds if Kamala Harris wins next month’s presidential election. It is said to be the brand he dislikes the most. That said, Jim doesn’t want to sell his Alphabet stock because the stock price should see some relief once the regulatory issues are manageable. (Jim Cramer’s Charitable Trust is long META, GOOGL. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investing Club, you’ll receive trade alerts from Jim Cramer before he makes a trade. I will receive it. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
