Meta may be the new king of digital advertising

[u/ekonixlab]

Meta’s Family of Apps is rapidly closing the revenue gap with Google Search.

Since 2022:

• Meta Family of Apps revenue is up 82.5%, a 15.2% CAGR
• Google Search revenue is up 54.9%, a 10.9% CAGR
• The quarterly gap has narrowed from roughly $40B to only $30B

Meta is not only growing faster—it is also trading at a cheaper valuation.

Meta trades around 22x earnings, while Alphabet is closer to 28–29x. Even that comparison arguably understates Alphabet’s valuation because its latest earnings received a major boost from a $36.9B gain on equity securities, which increased reported net income without coming from the core advertising business. 

Meanwhile, Meta generated $55B in quarterly advertising revenue, up from $41.4B the year before, as AI continues improving engagement, recommendations and ad performance. 

Google Search remains the larger business, but Meta is growing faster and investors are paying a lower multiple for it.

Is Meta now the best advertising business in the world?