Meta Platforms (META) and Google (GOOGL) have one thing in common. They are a pair of stocks on the
FAANGM or FANG list. After Meta changed its name from Facebook, tech investors still refer to those
stocks for leadership.
Meta and Google (or Alphabet) have similar valuations. But after Meta lost ~ 14% last week and Google
lost 7%, Meta stock is still less expensive on a price-to-earnings multiple. The social networking firm is
cheap for a reason. Advertisers are dumping Facebook and Instagram. Apple (AAPL) destroyed the ad
model when it gave privacy controls to users. Most users opted out of online tracking.
Meta’s pivot to a metaverse is expensive. Investors have faith that people will buy a headset to explore
this system. However, Facebook rose to prominence because the site did not cost users anything.
Metaverse has a low hardware cost but people are strapped for cash.
Google has better prospects for attracting advertisers. Yet it is not immune to the economic slowdown.
The company already issued spending cuts on non-essential travel. It will likely cut staff after over-hiring
in anticipation of 2022 growth. That growth is absent.
Both stocks are good buys. Which one is a better buy depends on your view of the P/E against the
growth ahead.
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