| Stock | Price | 52 Week Range | Marketcap | EPS | Dividend Yield | Chart (24H) | Sector | Employees | Last Updated |
|---|---|---|---|---|---|---|---|---|---|
| $607.75 | 1.53T | 21.21 | 0.34% | Communication Services | 69,329 | 8 hours ago | |||
 Alphabet Inc. GOOG | $197.57 | 2.41T | 7.55 | 0.41% | Communication Services | 180,895 | 8 hours ago |
The first half of 2024 is behind us, and what a period of growth it has been for the stock market! The **S&P 500** has surged over 14% and the **Nasdaq Composite** has soared by nearly 18%. Within this flourishing landscape, digital advertising stands out as one of the year’s top-performing sectors. For investors eyeing opportunities in adtech, the giants **Meta Platforms** ([META](https://marketmonitors.wpenginepowered.com/stock/quote/META/)) and **Alphabet** ([GOOG](https://marketmonitors.wpenginepowered.com/stock/quote/GOOG/)) present two compelling cases. The question is, which one offers better potential for the second half of 2024 and beyond?
Editor's Note: Analysis and insight for this article were originally sourced from our friends at The Motley Fool
### Meta Platforms (META): Dominating the Social Media Sphere
**Meta Platforms**, the parent company of Facebook, Instagram, WhatsApp, and Messenger, stands as a colossus in the social media realm. With more than 3 billion monthly active users (MAUs) across its platforms, Meta’s reach is staggering. Even more impressive, Meta’s MAU count has grown by 7% year-over-year, signaling its expanding influence.
In the latest quarter, Meta’s revenue was $36.5 billion, 98% of which came from ad sales. This figure alone underscores the company’s dominance in digital advertising. Further, Meta has seen a 20% increase in overall ad impressions. This consistent growth in ad impressions is a clear indicator of the company’s strong upward trajectory.
One significant metric that stands out is Meta’s free cash flow per share, which has spiked by an astounding 96% over the past two years. This growth in free cash flow is a cornerstone for generating shareholder value through dividends, share buybacks, debt repayment, or acquisitions. It’s not just a number; it’s the lifeblood of sustainable growth and shareholder returns.
#### Analyst Ratings for META
| Consensus Rating | Average Price Target | Current Price | Potential Gain | Number of Ratings |
|——————-|———————-|————–|—————–|———————|
| Strong Buy | $523.81 | $504.22 | 4.39% | 61 |
##### Summary of Analyst Outlook for Meta Platforms (META)
Meta Platforms Inc. has a consensus rating of “Strong Buy” based on the ratings of 61 analysts. The average 12-month price target is $523.81, with a range of $360.00 to $634.00. The current price is $504.22, indicating an average potential gain of 4.39% based on the average price target or a 3.41% gain based on the mean consensus target.
### Alphabet (GOOG): Diversified Ad Revenue Powerhouse
**Alphabet**, the parent company of Google and YouTube, is Meta’s formidable rival in the digital advertising space. Alphabet draws significant appeal from its diversified ad revenue streams. In the first quarter, Google Search alone generated $46.2 billion, making up 57% of Alphabet’s total revenue. On top of that, YouTube ads contributed $8.1 billion (10% of total revenue), and the company’s Google display network added an additional $7.4 billion (9% of total revenue).
Altogether, Alphabet amassed $61.7 billion from advertising in just one quarter. The diversified revenue sources exemplify Alphabet’s approach towards balancing growth with stability. With revenue contributions spread across various platforms, Alphabet presents a lower-risk profile for investors in comparison to Meta, which relies almost exclusively on ad sales.
Alphabet has also shown a steady increase in free cash flow per share, growing by 14% over the past two years. While this growth is more modest compared to Meta’s explosive numbers, it still represents a stable and reliable source of shareholder value.
#### Analyst Ratings for GOOG
| Consensus Rating | Average Price Target | Current Price | Potential Gain | Number of Ratings |
|——————|———————-|—————|—————-|——————-|
| Strong Buy | $199.25 | $182.15 | 9.39% | 38 |
##### Summary of Analyst Outlook for Alphabet (GOOG)
Analysts expect Alphabet Inc. Class C (GOOG) to perform well, with an average price target of $199.25, representing a 9.39% potential gain from the current price of $182.15. The consensus rating is a strong buy, based on 38 analyst ratings, with the majority of buy ratings (32) and no sell ratings. The forecasts range from $168.00 to $225.00, with average and high targets indicating a positive outlook for the stock.
## The Showdown: Meta vs. Alphabet
When directly comparing Meta and Alphabet, a few critical aspects stand out: revenue sources, free cash flow growth, and market dominance.
### Revenue Sources: Focus vs. Diversification
Meta’s almost exclusive reliance on ad sales could be seen as a double-edged sword. On one hand, it allows Meta to focus all its efforts on dominating the digital ad market. On the other hand, it leaves the company vulnerable to fluctuations within that sector. In contrast, Alphabet’s diversified revenue streams across Google Search, YouTube, and the Google display network offer a cushion against any potential downturns in a single segment.
### Free Cash Flow Growth: Meta’s Clear Advantage
In terms of free cash flow growth, Meta has demonstrated near sevenfold growth compared to Alphabet. This massive increase in free cash flow per share is a strong indicator of Meta’s ability to generate value for its shareholders. Free cash flow is fundamental for funding dividends, share buybacks, debt reduction, and acquisitions—all of which contribute to a solid investment thesis.
### Market Share and Future Projections
Both Meta and Alphabet enjoy a commanding share of the $740 billion digital ad market—a figure expected to skyrocket to $1 trillion annually by 2030. While both companies are well-positioned to capitalize on this growth, Meta’s rapidly expanding user base and exceptional financial performance tilt the scales in its favor for more aggressive investors looking for robust growth.
## Making the Call
Without a doubt, both Meta Platforms and Alphabet are strong contenders in the digital advertising arena. However, Meta Platforms emerges as the top adtech stock for the second half of 2024 due to its superior free cash flow growth and expanding reach among users. Alphabet’s diversified revenue streams and stable growth certainly make it a reliable choice, but Meta’s growth metrics propel it to the forefront as a more attractive option for investors seeking enhanced returns.
Before deciding where to allocate your investment dollars, consider exploring other top-performing stocks identified by Market Monitors experts. Timely and informed choices, like investing in Nvidia back in 2005, can yield impressive returns. Here’s to intelligent investing and significant returns!
