In the battle of the tech giants, Wall Street firm Bernstein favors Meta Platforms over Alphabet . The news Meta has replaced the Google parent as a “set-it-and-forget-it blue chip” stock given the social media company’s strength in its core advertising business and its monetization of artificial intelligence, Bernstein wrote in a Thursday note to clients. The analysts raised their Meta price target to $675 per share from $600 and kept their outperform buy rating on the stock. The new PT implies nearly 20% from Wednesday’s close. Bernstein acknowledged the valuation of Meta stock versus Alphabet “feels stretched” at the moment. However, the analysts are convinced that risk/reward on Meta is “balanced” in the near term and the long term. They said the launch of ads on Threads, making money on Reels, and a potential TikTok ban in the U.S., all offer upside to revenue. They also highlight Meta’s competitive edge in AI, which provides users with content recommendations, ad automation and placement, and creative tools. These differentiating factors provide Meta with a “long runway to outgrow the digital market,” they added. The bull/bear debate following first-quarter earnings “has largely disappeared” following a strong second-quarter print and third-quarter guidance, Bernstein said. The analysts also said that slowing ad spending from Chinese companies — mostly notably online retailers Temu and Shein — should not be something to overly worry about. Big picture Bernstein’s bullish assessment of Meta’s future growth prospects comes as the stock has significantly outperformed both the overall market and Alphabet. Meta shares have gained nearly 60% year to date compared to the S & P 500 ‘s more than 21% advance and the Google parent’s gain of 16% in 2024. META YTD mountain Meta Platforms YTD Before Wednesday’s 3% drop in an ugly market, Meta closed Tuesday just 2% off its record close of $595.94 on Oct. 4. The stock was stable Thursday at about $564, which is right around our Club price target of $560. We currently have our wait-for-a-pullback 2 rating on the stock in deference to this year’s rally. Bottom line Like Bernstein, we’re feeling really good about Meta. The social media giant has solidified its position as a one-stop shop for global advertisers. During the Club’s October Monthly Meeting last week, we were excited about more upside in store for Meta’s advertising business after Adobe launched its new AI-powered video tool for marketing. The Adobe offering is seen as good news for digital platforms such as Facebook and Instagram because it makes creating content easier for companies looking to place ads. As for Alphabet, it’s Jim Cramer’s least favorite of the “Magnificent Seven” stocks given that antitrust headwinds could continue if Kamala Harris were to win next month’s presidential election. That said, Jim does not want to sell our stake in Alphabet because once the regulatory issues become manageable, the stock should get some relief. (Jim Cramer’s Charitable Trust is long META, GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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