Alphabet Inc.

NASDAQ Global Select
Back to all articles
Somewhat Bullish +45

Gary Black Says Meta Stock Could Mirror Alphabet's Post-Earnings Recovery: Here's Why the Analyst Calls Google 'The Better Business'

📈 Analyst Gary Black predicts Meta (META) could mirror Alphabet's (GOOG/GOOGL) recent post-earnings recovery trajectory.

📊 Alphabet trades at a premium valuation of ~17x 2026 EV/EBITDA versus Meta's ~11x multiple.

🚀 Black cites Google's search dominance, cloud growth, and Gemini chatbot as key advantages over Meta.

📉 Meta shares fell 7.45% in extended trading on Wednesday following earnings that missed expectations.

💰 Year-to-date, Meta is down 17.12% while Alphabet's Class A and C shares are up ~6%.

🧠 Investors expressed skepticism regarding Meta's escalating AI investments despite solid advertising fundamentals.

📅 Analysts like Barton Crockett note rampant skepticism around Meta despite maintaining bullish ratings.

🔍 The article compares valuation metrics, noting Alphabet's 20% long-term revenue growth vs. Meta's 18%.

Bullish Signals
  • Analyst Gary Black explicitly states that Alphabet (GOOG/GOOGL) has the 'better business' compared to Meta due to its search and cloud segments.
  • Alphabet trades at a higher valuation multiple of approximately 17 times 2026 EV/EBITDA, signaling strong market confidence in its growth prospects.
  • Alphabet's stock has recovered about 5% after an initial drop, demonstrating investor willingness to look past conservative guidance.
  • Alphabet is projected to grow long-term revenue at roughly 20%, which is comparable to or slightly higher than Meta's 18% projection.
  • Analysts like Justin Post believe investors may be underestimating Meta's ability to monetize its growing AI infrastructure, suggesting potential upside.
Risk Factors
  • Meta shares fell 7.45% in extended trading on Wednesday and tumbled further on Thursday due to heavy AI spending concerns.
  • Management provided slightly negative near-term guidance that missed Wall Street expectations, triggering widespread concern.
  • Analysts across Wall Street have cut price targets for Meta despite most maintaining bullish ratings.
  • Year-to-date, Meta shares have lost 17.12%, indicating significant recent underperformance compared to Alphabet's gains.
Full Analysis
Analyst Gary Black of The Future Fund argues that Meta Platforms (META) stock could experience a recovery similar to Alphabet Inc.'s (GOOG/GOOGL) recent post-earnings rebound. Black suggests investors are currently overreacting to conservative guidance and one-time items, noting that Alphabet's stock fell roughly 10% initially before recovering about 5% as the market reassessed its fundamentals. Black identifies Google as the superior business due to its dominant search segment, rapidly expanding cloud division, and Gemini chatbot capabilities, which Meta lacks. He highlights that Alphabet trades at approximately 17 times 2026 EV/EBITDA with an estimated long-term revenue growth of 20%, compared to Meta's valuation of roughly 11 times EV/EBITDA and 18% projected growth. Despite the bullish comparison, Meta faces significant headwinds following its earnings report. Shares dropped 7.45% in extended trading on Wednesday and tumbled further on Thursday as investors reacted negatively to heavy AI spending and guidance that missed Wall Street expectations. Consequently, year-to-date performance shows Meta shares down 17.12%, while Alphabet's Class A and C shares have gained about 6%.