Monday proved a strange day for tech stocks, as Meta Platforms (NASDAQ:META) gained while Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) lost ground. The reason? A recently-released report from Loop Capital analyst Rob Sanderson.
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Sanderson, joined by Alan Gould, noted that Meta stock has already seen some excellent results this year so far, nearly doubling in value in year-to-date figures. Even the broader market itself is up just 8%. But Sanderson and Gould like where Meta is going so far and look for revenues to increasingly improve as the rest of the year continues. While competition is still keen in the sector, Meta has a nice install base of unique users and is pulling in solid results with the quality of its infrastructure overall.
The picture wasn’t quite so rosy at Alphabet, though, as Sanderson looked to “structural uncertainties” at the tech titan. While some looked at last week’s I/O event with positive eyes—thanks to the panoply of developments the show released—Sanderson wasn’t sure that Alphabet could push its way back to the top and effectively monetize all its new developments. There is a best-case for Alphabet, starting with more rapid cost cuts and accelerated stock buybacks, but investors will require a lot of proof before they’re willing to stick around, Sanderson concludes.
Most analysts, meanwhile, don’t seem worried in either case. Both Meta stock and Alphabet stock are considered Strong Buys by analyst consensus. However, Alphabet stock only offers 7.81% upside potential with an average price target of $126.17. Meanwhile, Meta Platforms stock offers over twice that, as its $283.68 average price target gives it 18.8% upside potential.
