Meta Just Crushed Earnings. Is It a Better Buy Than Alphabet?
Meta continues to deliver strong growth on the top and bottom lines.
Its advertising business is benefiting from its AI investments.
The social media giant has some advantages over rival Alphabet.
10 stocks we like better than Meta Platforms ›
Meta Platforms' (NASDAQ: META) hot streak continued on Wednesday after the social media giant delivered another blowout earnings report for the second quarter. The stock jumped double digits after hours, and Meta was on track to set a new all-time high on Thursday.
Revenue jumped 22% to $47.5 billion, which easily beat estimates at $44.8 billion. Revenue growth was driven by a balanced mix of growth in users, up 6%, ad impressions, up 11%, and price per ad, which rose 9%.
Those results show its ad business is firing on all cylinders, and CEO Mark Zuckerberg credited its artificial intelligence (AI) investments for the improvements, noting that its AI-powered recommendation model helped drive 5% more ad conversions on Instagram and 3% more on Facebook. The improved ad performance helped lead to the growth in price per ad, showing that Meta's AI investments in advertising are paying off.
Meta's margins continued to expand, with its operating margin rising from 38% to 43%, and earnings per share rose from $5.16 to $7.14, well ahead of the consensus at $5.90. It also sees strong growth continuing into the third quarter, calling for revenue of $47.5 billion to $50.5 billion in Q3 revenue, which compares to the consensus at $46.3 billion.
Why Meta's growth is soaring
Over the last few years, Meta has outperformed peers like Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Microsoft, and Amazon by a wide margin. And the second-quarter results show that the market may still be underestimating the company.
In the AI era, Meta has excelled at growing its core advertising business while also making investments in AI to seed emerging businesses, like its smart glasses, and to make acquisitions, including its deal to buy half of data-labeling start-up Scale AI for $14.3 billion.
That acquisition brought Scale founder Alexandr Wang into the Meta fold, where he's leading Meta's new Superintelligence Labs. The company sees superintelligence improving multiple aspects of the business, including advertising, experiences, business messaging, Meta AI, and AI devices.
In addition to the improvements to its ad-recommendation engine, Meta is gaining traction with its generative AI ad creation features, another way it's adding value for advertisers. Meta has achieved this growth in the overall business even as Reality Labs, its division focused on projects like AI and the metaverse, continues to lose upwards of $15 billion a year. However, the losses now seem to be stabilizing.
Better buy: Meta versus Alphabet
Meta's closest competitor in digital advertising is Alphabet, which, as the parent of Google Search, is the biggest digital advertising platform in the world. Both companies have strong competitive advantages, but Meta has outgrown its larger rival over the last several quarters due in part to the advances and investments in AI.
Alphabet, on the other hand, has also incorporated AI into Google Search through its AI assistant and AI mode. However, those features don't directly benefit the Google ad business. Instead, they seem to be more of a function of the company's need to defend its market share against AI-based competition such as ChatGPT and Perplexity. The innovations make sense, but they don't have the same benefit to the bottom line that Meta's do.
Additionally, the two companies seem to have different cultural approaches to AI. Alphabet has long invested in AI but was reluctant to deploy new products for fear it would disrupt its monopoly in search. Meta, on the other hand, has been nakedly aggressive in AI recently, poaching researchers from Apple and making multiple acquisitions, including Scale AI.
Overall, Meta is growing faster, and its AI strategy seems to fit better with its core business. The company seems well-positioned to continue delivering strong growth, especially as its ad machine stands to benefit from its AI investments.
Both Alphabet and Meta can be winners on the stock market, given their competitive advantages, but Meta looks like the better buy of the two today.
Should you buy stock in Meta Platforms right now?
Before you buy stock in Meta Platforms, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Meta Platforms wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!*
Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 29, 2025
Jeremy Bowman has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Meta Just Crushed Earnings. Is It a Better Buy Than Alphabet? was originally published by The Motley Fool
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
13 minutes ago
- Yahoo
NYC mayoral hopeful Curtis Sliwa's group bills itself a charity despite losing tax-exempt status
NEW YORK —Republican mayoral candidate Curtis Sliwa's crime prevention group, the Guardian Angels, is soliciting donations while portraying itself as a tax-exempt charity — even though it was stripped of that status years ago amid tax issues and legal troubles involving the organization's longtime treasurer, according to a Daily News review of federal and state records. The Guardian Angels, which Sliwa founded in 1979 and still controls as CEO, hasn't filed a 990 Form with the U.S. Internal Revenue Service since 2019, the IRS's publicly available nonprofit database shows. In that database, the group's legal business name is listed as Alliance of Guardian Angels, Inc. The 990 Form is the equivalent of a tax return for a charitable organization, and due to the Guardian Angels' failure to file 990s three years in a row, the IRS revoked its tax-exempt 501(c)(3) charity designation in November 2022, per a notice included on the group's profile in the database. The revocation came a year after Rafael Alvarez, the Guardian Angels' now-former treasurer, landed in trouble with the U.S. Department of Justice, which forced his accounting firm, ATAX, to shutter permanently in 2021 due to a suspicion he was filing fraudulent returns for clients — a case that eventually resulted in Alvarez pleading guilty to criminal charges. Despite the charity status, the Guardian Angels has continued to describe itself as a 501(c)(3) group on its website, including on a page where it's asking supporters for money. 'The Alliance of Guardian Angels is a non-profit 501 (c) (3) organization founded in 1979 in New York City,' a banner reads on the page soliciting contributions via a big red 'donate' button that sends supporters to a PayPal page if they click it. 'Our mission is to provide positive role models for today's youth and work toward promoting community safety and betterment for the good of society overall.' According to legal experts, falsely portraying a group as a 501(c)(3) can result in fines and even criminal charges, especially if the misrepresentation involves the solicitation of donations. Taxpayers who donate to nonprofit charities who've lost their 501(c)(3) status can, in turn, also end up getting in trouble with the IRS if they claim their contributions as tax deductible. 'When a charitable nonprofit is no longer recognized as tax-exempt, it will be required to pay income taxes on revenue, including donations, and donors will no longer be able to deduct contributions to the organization,' according to the National Council of Nonproifts. IRS' press office didn't immediately return a request for comment this week. In addition to the IRS delinquencies, the Guardian Angels hasn't submitted tax filings with the New York state attorney general's office as required since 2019, either, an AG spokeswoman confirmed. The spokeswoman wouldn't comment further, but the AG's office typically works with delinquent nonprofits to try to get them into compliance before taking any enforcement action. Sliwa's campaign referred questions to Mario Kranjac, an attorney for the Guardian Angels, who blamed the filing failures on Alvarez, who served as the group's treasurer for over a decade and was personally friendly with Sliwa. Kranjac said the Guardian Angels believed all tax returns had been filed properly by Alvarez. 'Curtis Sliwa had no involvement in financial filings,' said Kranjac, an ex-mayor of Englewood, N.J. who mounted an unsuccessful Republican bid for governor of the state this year. 'The Guardian Angels are allowed to continue operating and are taking steps to correct the issue with counsel.' The tax troubles involving the Guardian Angels, whose members have been known for doing street and subway 'safety patrols,' are emerging as Sliwa is gearing up his GOP bid for mayor ahead of November's election. The revelations about the tax filing failures — and previously unreported details about Alvarez's role in the Guardian Angels' finances — could cast a shadow over Sliwa as he campaigns heavily on an anti-corruption message. It also raises questions about how, as mayor, Sliwa would manage a city with an annual budget of $116 billion, in addition to his own campaign, which just on Wednesday received $1.9 million in public matching funds. Alvarez served as the Guardian Angels' treasurer between 2010 and 2024, per his LinkedIn profile. Before the Guardians abruptly stopped submitting 990s, Alvarez and his accounting firm used to prepare and handle all of the group's federal and state tax filings, The News' review found. In those filings, Alvarez identified himself both as the group's treasurer and accountant. An attorney for Alvarez — who's currently in prison — didn't say why he stopped filing the group's taxes in 2019. The attorney, Michael Bachrach, did say he wasn't sure whether Alvarez ever filed fraudulent tax forms for the Guardian Angels. 'There were over 80,000 tax returns disclosed in discovery in that case, some fraudulent and other perfectly lawful,' said Bachrach. 'I don't recall whether Guardian Angels were amongst them.' When Alvarez had his firm shuttered by the feds in June 2021, he was already under criminal investigation by the DOJ over suspicions he had helped clients file tax returns with the IRS claiming fraudulent deductions for fictitious charity donations, medical costs and other expenses in order to lower their tax burdens, according to his indictment and other filings made in his case. In April 2024, the Manhattan U.S. attorney's office indicted Alvarez on charges alleging he had orchestrated a sprawling tax fraud scheme between 2010 and 2020 — spanning the period when he was handling the Guardian Angels' books — in which he and his firm stole $145 million from the IRS. His indictment alleged Alvarez was known as 'The Magician' among his clients because of the advanced methods he used to defraud the IRS. This spring, Alvarez was sentenced to four years in prison, ordered to forfeit more than $11 million and pay, together with any clients identified as having participated in the scheme, $145 million in restitution to the U.S. government. Alvarez's indictment doesn't identify his clients, but prosecutors wrote in court papers this spring some of them are being made to pay years' worth of back taxes. The Guardian Angels, which as a 501(c)(3) was exempt from most — but not all — federal and state taxes, isn't referenced in Alvarez's indictment and hasn't been accused of any wrongdoing. Sliwa and Alvarez go back personally, and he has over the years hyped up Alvarez's business many times on the radio. Speaking on his talk radio show in 2012, Sliwa called Alvarez 'my very cumpà,' Italian slang that translates to close friend, and told listeners in need of tax help: 'You need to talk to a professional, and the best is Rafael Alvarez.' Sliwa's group also gave Alvarez its coveted 'Red Beret Award' in 2011. On the campaign trail, Sliwa has vowed to turn the page on the dysfunction and corruption he argues has marred Mayor Adams' time at City Hall, pointing to the incumbent's federal bribery indictment, which was quashed this spring by President Trump's DOJ as part of a controversial arrangement. Sliwa ran unsuccessfully for mayor in 2021, clinching about 28% compared to the 67% received by Adams, the Democratic mayoral nominee in that race. Sliwa's seen as having a better shot this year, as the city's Democratic vote could be fractured by the fact that, in addition to Democratic nominee Zohran Mamdani, Adams and Andrew Cuomo are running on independent lines on the November ballot. Attorney Jim Walden is on an independent line as well. Mamdani continues to poll as the favorite to win the November contest, with most surveys predicting Cuomo as the runner-up candidate. Sliwa has in a number of polls placed third, pulling more support than Adams. _____
Yahoo
13 minutes ago
- Yahoo
Trump Says He'll Likely Name Temporary Fed Governor to Open Seat
(Bloomberg) -- President Donald Trump indicated he would likely nominate a temporary Federal Reserve governor to fill the soon-to-be vacant seat on the central bank's board within the coming days, rather than use the seat to signal his choice to replace Jerome Powell as chairman. All Hail the Humble Speed Hump Mayor Asked to Explain $1.4 Billion of Wasted Johannesburg Funds Three Deaths Reported as NYC Legionnaires' Outbreak Spreads Major Istanbul Projects Are Stalling as City Leaders Sit in Jail PATH Train Service Resumes After Fire at Jersey City Station 'We're probably going to go with the temp and then a permanent,' Trump told reporters Wednesday at the White House. 'I think the temp is going to be named, I'd say, over the next two, three days, and then we're going to go permanent.' Fed Governor Adriana Kugler announced last week that she plans to vacate her role on Aug. 8. That gives Trump a choice. He can elevate someone to serve out the rest of her term, which expires in January, and keep weighing his options for the more prominent chair role, or he can make a decision on the Fed chair role months earlier than he'd planned and announce that now. Several of those on Trump's Fed short list are outsiders, and the president isn't guaranteed to get another chance to name a new board member before Powell's term as chair expires in May. While Fed chairs typically step off the board when they step down, he does have the option to stay on and deny Trump a second opening. Powell's underlying post as a governor extends into 2028 and he has so far declined to reveal his plans. Advisers had encouraged the president to name a short-term pick first, simply to complete Kugler's term that expires in January. That approach would give Trump weeks or months more to interview candidates to serve as chair. And it's the strategy Trump said Wednesday he's leaning toward. Trump said he was considering 'probably' three candidates for the temporary position, adding that they could come from Wall Street. 'Yeah, essentially, we're all from Wall Street, aren't we, when you get right down to it?' Trump said. He added that Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, and Vice President JD Vance were among the advisers participating in the process. Separately, Trump reiterated that he considered 'the two Kevins' — former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett — as top candidates for the Fed Chair role when it becomes open. --With assistance from Justin Sink. (Updates with additional details on Fed timing and selection process starting in fourth paragraph.) Russia's Secret War and the Plot to Kill a German CEO The Pizza Oven Startup With a Plan to Own Every Piece of the Pie AI Flight Pricing Can Push Travelers to the Limit of Their Ability to Pay Government Steps Up Campaign Against Business School Diversity The GOP Is Choosing Pesticides Over the MAHA Moms ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 minutes ago
- Yahoo
Keppel's (SGX:BN4) Shareholders May Want To Dig Deeper Than Statutory Profit
Explore Keppel's Fair Values from the Community and select yours The recent earnings posted by Keppel Ltd. (SGX:BN4) were solid, but the stock didn't move as much as we expected. We think this is due to investors looking beyond the statutory profits and being concerned with what they see. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. How Do Unusual Items Influence Profit? For anyone who wants to understand Keppel's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from S$431m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And, after all, that's exactly what the accounting terminology implies. Keppel had a rather significant contribution from unusual items relative to its profit to June 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Our Take On Keppel's Profit Performance As we discussed above, we think the significant positive unusual item makes Keppel's earnings a poor guide to its underlying profitability. For this reason, we think that Keppel's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But at least holders can take some solace from the 19% EPS growth in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. So while earnings quality is important, it's equally important to consider the risks facing Keppel at this point in time. Our analysis shows 3 warning signs for Keppel (1 is a bit unpleasant!) and we strongly recommend you look at these before investing. This note has only looked at a single factor that sheds light on the nature of Keppel's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
