Is there new government-related trouble ahead for Alphabet (NASDAQ:GOOG) and Meta Platforms (NASDAQ:META)? Based on what’s going on in both stocks’ share prices today, there’s not much to worry about. However, with the government actively considering an investigation into both, and their surprising relationship to taxpayer data, there might be more afoot than meets the eye.
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Both Alphabet and Meta were up in Wednesday afternoon’s trading. Yet, both may have been caught with their hand in one of the worst possible cookie jars: taxpayer data. Specifically, tax prep software, that was routing data to the duo. Apparently, several software makers, including TaxSlayer and TaxAct, were sharing “sensitive financial data” using a bit of code called a “pixel.” That pixel routed useful marketing data like email addresses, names, and income levels back to Meta. TaxAct also sent a similar pixel to Google, though without names.
However, both Meta and Google spoke out against the idea, noting that certain policies were in place to prevent such information sharing. The potential, however, was there that some sharing might have been done “accidentally,” and that’s likely what’s being the calls for an investigation. An earlier investigation, though, suggests that this was indeed going on, and had been going on for several years. Depending on how all the investigating boils down, this could mean everything from civil lawsuits to criminal penalties against the tax prep companies.
This isn’t doing much damage to either Meta or Alphabet, though; both are considered Strong Buys by analyst consensus. However, Alphabet stock offers investors a 7.08% upside potential thanks to an average price target of $127.88. Meanwhile, Meta offers a slight 0.07% downside risk with its average price target of $305.53.
