JPMorgan switches out Alphabet with Meta on its Analyst Focus list, wagering on AI-powered ad gains.
JPMorgan has removed Google owner, Alphabet from its Analyst Focus List and added Meta instead.
The JPMorgan Analyst Focus list is a curated selection of stock picks listed by equity research analysts, representing their preferred investments within sectors.
The consultancy group is prioritising the AI-driven ad gains and monetisation capabilities, which Meta is capitalising on.
Despite Meta facing fines of up to $1.4trn over claims its platforms harmed children’s mental health – a figure that is close to the its $1.53trn market value – the social media giant’s Q3 earnings report showed strong growth.
Meta’s revenue increased by more than a quarter year-on-year (YoY) to hit $64m, while its ad impressions and average price per ad had risen by 10% and 14% YoY, respectively.
Analyst Doug Anmuth confirmed the change is primarily due to the strong advertising offerings from the social media firm: “Coming out of 3Q earnings, Meta’s relative advertising strength is more evident than ever.”
This change puts Meta as a preferred pick alongside Amazon for JPMorgan across its internet coverage.
The Facebook-owner’s growth in North America accelerated to 33% last quarter, generating around $13bn in incremental advertising revenue, which is around twice the additional revenue generated by Google Search, JPMorgan estimated.
Meta’s strong results can be attributed to AI-fuelled improvements in ad rankings, targeting, and retrievals, boosting ad conversions, according to JPMorgan.
It is on track to overtake Google as the leading global digital-advertising business by the end of 2026 to earn over an estimated $243bn in ad revenue, eMarketer forecasts. Meanwhile, Google is projected ad revenue for 2026 sits almost $240bn.
Meta’s investment in AI products, such as Muse and Meta Model API, have shown promise, with Muse generating 10 million US sign-ups, Anmuth pointed out.
Betting against Alphabet’s AI business
By comparison, Google’s Q3 results presented challenges for the search giant.
While the company recorded a saw its overall revenue increase by 15% to reach $127.6bn, Google Search revenue growth slowed to 12% in Q3, down from 19% in Q1 and 17% in Q2 for 2026, despite the tech giant reporting its fastest query growth in five years.
During the investor’s call Google announced it was expanding advertising in AI Mode globally, suggesting the company is betting on AI to revive its growth, however JPMorgan is not convinced.
The consultancy group’s removal of Alphabet from its list echoes concerns about its pace of monetisation from AI rather than detorioration. This mirrors the reasons why Google’s share’s dropped by more than 12% – it’s worst day in trading – following the publication of its Q3 earnings.
Whether the revenue from sponsored placements in AI Mode will be comparable to the once dominant ad revenue from traditional Google Search remains to be seen – although analysts seem to be betting against this.
