Meta Obliterates Earnings: Time to Dump Alphabet for Zuck’s Cash Machine?

Mark Zuckerberg's empire just flexed its financial muscles—while Alphabet scrambles to keep pace. Here's why Wall Street's buzzing.

The Numbers Don't Lie

Meta's latest earnings report reads like a victory lap. Revenue surged, profits ballooned—meanwhile, Google's parent company keeps playing catch-up in the AI arms race.

The Reels vs. Search Smackdown

Short-form video advertising is eating traditional search's lunch. Meta's targeting engine? Sharper than a hedge fund manager's suit.

Metaverse or Moneyverse?

Zuck's virtual playground still burns cash, but investors don't care when core apps print money. Classic 'fake it till you make it'—with better margins.

Bottom Line: In a world where attention is currency, Meta's minting it—while Alphabet counts its last-gen ad dollars. (But hey, at least Google still has those 200+ moonshot projects losing money, right?)

Image source: Getty Images.

Why Meta's growth is soaring

Over the last few years, Meta has outperformed peers like(GOOG -1.51%) (GOOGL -1.45%),, andby 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 fromand 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.