Alphabet: Unrivalled Search Dominance
Alphabet, the force behind Google Search, continues to reign supreme, commanding over 90% of the global search market. This dominance is set to persist, propelled by Alphabet’s unwavering commitment to artificial intelligence (AI).
Utilizing AI in innovative ways, Alphabet is enhancing its core revenue source – advertising. In the last quarter alone, Google’s advertising revenue surged by 10% to reach $65 billion, constituting 75% of total revenue.
AI technologies have revolutionized the search experience, with generative AI reducing search latency by a substantial 40% for U.S. English searches. Moreover, AI advancements are enriching search results, offering users concise summaries, diverse links, and a comprehensive outcome. Such enhancements attract and retain users, cementing Alphabet’s appeal to advertisers seeking to reach a wider audience.
Trading at a mere 19 times forward earnings estimates, Alphabet emerges as a bargain. Given its extensive search market share and the transformative potential of AI, investors are presented with a lucrative opportunity.
Meta Platforms: Harnessing AI for Future Growth
Meta Platforms, synonymous with popular social media apps like Facebook, Messenger, Instagram, and WhatsApp, derives its revenue primarily from advertising. Witnessing a robust 25% revenue surge in the recent quarter, exceeding $40 billion, Meta is venturing deep into the realm of AI.
Empowering AI as a strategic focus, Meta is laying the groundwork for future product innovations. The company has spearheaded the development of the Llama large language model (LLM) and is intensively training version 3. Meta’s substantial investments in graphics processing units (GPUs) to fuel AI models position it as a frontrunner in the AI domain.
Meta’s ambitious vision involves integrating AI into its suite of products, envisioning personalized AI assistants for users and facilitating developers, content creators, and businesses alike in streamlining operations. Through judicious investments, Meta aspires to emerge as a trailblazer in the AI landscape.
Trading at just 24 times forward earnings estimates, Meta Platforms offers a compelling investment proposition. With robust earnings from its core social media business and a strategic AI roadmap, Meta stands poised for sustained growth.