Meta just crushed earnings. Is it a better purchase than an alphabet? | Motley fool

Meta platform‘ (Meta -2,99%) Hot Streak continues on Wednesday after giant social media has delivered another report on earnings for the second quarter. The stocks after hours jumped up the two -digit digits and the meta was on the way to set the new historical maximum on Thursday.

The returned returned by 22% to $ 47.5 billion, which easily defeated estimates of $ 44.8 billion. Returned growth was powered by a balanced combination of user growth, 6%, impressions of AD, up to 11%and price for NL, white pink 9%.

These results show that his advertising business is shooting at all war and CEO Mark Zuckerberg scored his investment in artificial intelligence (AI) for improvement and noted that his AI recommendation model helped drive 5% more advertising on Instagram Ao 3% more on Facebook. Improved advertising performance helped lead to NL price growth, which shows that the investment of AI meta is paid in advertising.

Metaine margins continued to expand and its operational margins increased from 38% to 43% and the share per share increased from $ 5.16 to $ 7.14, which is much before consensus to $ 5.90. He also sees that strong growth continues to the third quarter and calls for $ 47.5 billion to $ 50.5 billion in income in the 3rd quarter, which is $ 46.3 billion compared to consensus.

Why meta growth rises

Over the past few years, the meta exceeded peers as Alphabet (Google -1.51%) (Googl -1.45%),, Microsoftand Amazon with a wide range. The results of the second quarter show that the market can still underestimate the company.

In the AI era, the meta has excellent in the growth of its basic advertising business and at the same time invests in AI to appear seeds such as its smart glasses, and for acquisitions, included its agreement on the purchase of half of AI indicating data for $ 14.3 billion.

This acquisition of the founder of Brupt Scale Alexander Wang to Meta Fold leads, where the new Meta Superintelligence Labs leads. The company sees superintelligence to improve several aspects of business, including advertising, experience, commercial reports, meta AI and AI equipment.

In addition to enhancement of its ad control engine, a meta gets traction with generative functions of AI advertising, which is another way of adding value to advertisers. Meta has achieved this growth in Oveall Business, although its division focused on projects such as AI and Metavers, still losing more than $ 15 billion a year. However, losses seem to stabilize.

Better Purchase: Meta versus alphabet

The closest competition of META in digital advertising is the alphabet, which, as a parent searching Google search, is the world’s largest digital advertising platform. Both companies have strong competitive advantages, but the meta has grown in the last few quarters of its larger opponent due to progress and investment in artificial intelligence.

On the other hand, the alphabet also incorporated AI into Google Search via AI Assistant and AI mode. However, these features do not directly use Google and. Instead, they consider it the function of the company to prevent their market share against AI -based competition, such as chatgpt and confusion. Innovations make sense, but do not have the same advantage for the bottom line as the meta does.

In addition, both companies seem to have different cultural approaches to AI. For a long time, the alphabet has invested in a goal that has read the deployment of new products for fear of disrupting its monopoly in search. Meta, on the other hand, was in AI strenuously aggressive and poachers of scientists from Apple And the performance of more acquisitions, included a scale of AI.

Overall, the meta is growing faster and it seems that its AI strategy better corresponds to its business. It seems that the company is well placed to continue providing strong growth, especially because its advertising machine benefits from its investment.

Both the alphabet and the meta can be winners on the stock market, due to their advantages in the competition, but the meta looks like a better purchase of these two today.

Jeremy Bowman has positions on Amazon and Meta platforms. Motley Fool has positions and recommends alphabet, Amazon, Apple, Meta Platform and Microsoft. Motley Beble recommends the following options: long January $ 2026 395 calls on Microsoft and short January 2026 405 calls on Microsoft. Motley fool has a publication of politics.