What the Future Holds for Alphabet vs. Meta

Just when it looked like Wall Street’s shellacking of Meta Platforms’ stock had ended, we got more news today that reinforced anxieties about the company formerly known as Facebook. Yes, Google’s announcement that it will follow Apple in curtailing ad tracking can only make life harder for Meta’s ad business. (For more on Google’s plans, see our analysis.) And as Google was relatively unaffected by Apple's changes, you would think Google's advertiser advantage over Meta should improve further as a result of Google's own changes.

Certainly that appears to be how Wall Street sees things. Meta stock fell 2% today, bringing its year-to-date decline to about 36%. Shares of Google parent Alphabet, meanwhile, inched up fractionally and are down only about 5% for the year to date. On a price-earnings multiple basis, Alphabet now trades at a significantly greater premium to Meta than has been true, on average, since 2018, according to data from Koyfin. But is the future path for the two companies really as different as the stocks imply?