Meta Platforms, Inc.

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Somewhat Bearish -35

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

AI-generated analysis

πŸ“ˆ Gary Black predicts Meta stock could mirror Alphabet's recent recovery after earnings, suggesting investors should look past conservative guidance.

πŸ“‰ Meta shares fell 7.45% on Wednesday and closed 7.95% lower on Thursday at $539.03 following heavy AI spending concerns.

πŸ’° Wall Street analysts have cut price targets for Meta despite maintaining bullish ratings due to missed guidance expectations.

πŸ€– Investors are concerned about escalating AI investments, with Rosenblatt's Barton Crockett citing rampant skepticism.

☁️ Black argues Alphabet is the stronger business due to its search segment, cloud growth, and Gemini chatbot advantages.

πŸ“Š Alphabet trades at 17 times 2026 EV/EBITDA versus Meta's 11 times multiple according to The Future Fund analyst.

πŸš€ Alphabet is growing long-term revenue at roughly 20% compared to Meta's approximately 18% growth rate.

πŸ“‰ Year-to-date, Meta shares have lost 17.12% while Alphabet's Class A and C shares are up about 6%.

πŸ” Benzinga edge rankings show META has a Momentum score in the 12th percentile but a Growth score in the 89th percentile.

πŸ—£οΈ Bank of America analyst Justin Post believes investors may be underestimating Meta's ability to monetize its AI infrastructure.

Bullish Signals
  • Bank of America analyst Justin Post believes investors may be underestimating Meta's ability to monetize its growing AI infrastructure.
  • Benzinga edge rankings indicate META has a Growth score in the 90th percentile, highlighting strong underlying business metrics despite recent price weakness.
Risk Factors
  • Meta shares fell 7.45% on Wednesday and closed 7.95% lower on Thursday at $539.03 following heavy AI spending concerns.
  • Wall Street analysts have cut price targets for Meta despite maintaining bullish ratings due to guidance missing expectations.
  • Rosenblatt's Barton Crockett notes that skepticism is rampant regarding Meta despite solid advertising fundamentals.
  • Meta shares are down 17.12% year-to-date compared to Alphabet's Class A and C shares which are up about 6%.
Full Analysis
Gary Black of The Future Fund argues that Meta Platforms (META) stock could experience a recovery similar to Alphabet Inc.'s (GOOGL/GOOG) recent post-earnings rebound. Black suggests investors should look past conservative guidance and one-time items, noting that Alphabet's initial 10% drop was followed by a 5% gain as the market reassessed its fundamentals. The analyst contends that Meta is likely to follow this same trajectory as investors digest its earnings report. While Wall Street analysts have cut price targets due to concerns over escalating AI investments and guidance missing expectations, Black maintains that the selloff may be an opportunity for a rebound once the initial reaction subsides. Black explicitly states that Alphabet remains the stronger business due to its dominant search segment, rapidly growing cloud division, and Gemini chatbot, advantages Meta currently lacks. He highlights that Alphabet trades at approximately 17 times 2026 EV/EBITDA with roughly 20% long-term revenue growth, compared to Meta's 11 times multiple and 18% growth rate. Despite being cheaper, Black concludes that GOOG likely possesses the better business model. The article notes that while META shares fell 7.45% on Wednesday and closed 7.95% lower on Thursday at $539.03, Alphabet's Class A and C shares are up about 6% year to date.