:max_bytes(150000):strip_icc()/GettyImages-21970695711-470dee431bcb4d6baa34dc0775f977b1.jpg "This Wall Street Firm Says Alphabet Stock Is A Better Bet Than Meta. Here’s Why.")
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Key Takeaways
- Analysts at Oppenheimer updated their targets on shares of Alphabet and Meta this weekend, saying they prefer the former to the latter.
- They cited what they saw as a friendlier valuation on Alphabet’s shares, as well as more conservative Street estimates.
You don’t necessarily have to choose between the stocks of two Big Tech giants—but if you must, Oppenheimer has a pick for you.
Shares of both Google parent Alphabet (GOOG, GOOGL) and Meta Platforms (META), owner of Facebook and Instagram, have been strong performers this year, outpacing the Roundhill Magnificent Seven ETF (MAGS) and the S&P 500.
Still, Oppenheimer’s analysts prefer the former’s shares to the latter’s. On Sunday, they put a $300 price tag on Alphabet, about 18% above Friday’s close and the highest on Wall Street, and an $825 target on Meta, 15% higher than last week’s finish and below Visible Alpha’s analyst average. The Oppenheimer analysts cited what they considered “more conservative” Street estimates on Alphabet, along with a lower valuation on the shares.
Why This Matters to Investors
While the Magnificent Seven group of big tech stocks has outpaced the S&P 500 this year, under the hood there are signs that it might make sense to pick and choose carefully among them. One example: Three of the stocks have underperformed the S&P 500 this year.
“While we are positive on the long-term benefits from Meta’s push into AI and proven ability to outgrow peers,” they wrote, “we are more bullish on [Alphabet] near term, given more conservative estimates and lower valuation.”
While the Magnificent 7 is running ahead of the S&P 500 this year, it’s not surprising that investors might be looking to pick and choose among the group these days: Three of the seven stocks have underperformed the benchmark index year-to-date.
More stocks outside the group are lifting the index than in recent years, Capital Group wrote last week, a reference to what’s known as market breadth, marking “a healthy move away from the extreme concentration that raised concerns about risks to investor portfolios.”
“Rising valuations among companies in the index and more clarity on tariffs and interest rate cuts could help lift the U.S. equities market, which has trailed those in Europe and elsewhere,” Capital Group wrote.
