Youtubeยท2025-10-31 00:00Core Insights - Meta and Alphabet reported strong quarterly performances, but the market reacted differently, with Meta's stock down over 11% while Alphabet saw positive momentum [1][2] - Meta's revenue growth of 26% was the highest in 15 quarters, driven by AI investments, but concerns about future operating expenses and margins are affecting investor sentiment [6][2] - Alphabet's search revenue grew by 15%, marking its strongest growth since the launch of ChatGPT, and the Google Cloud backlog increased significantly, indicating strong future growth potential [15][16] Meta Analysis - Meta's investments in AI are expected to yield long-term returns, but current market concerns focus on 2026 operating and capital expenditures, which may impact margins [2][3] - Unlike competitors like Amazon and Microsoft, Meta lacks a public cloud business to offset AI investment risks, making it crucial for Meta to demonstrate ROI from its AI initiatives [4][5] - The company has a history of aggressive spending, and while current AI efforts have been mixed, improvements in execution are necessary to regain investor confidence [9][13] Alphabet Analysis - Alphabet's fair value estimate has been raised to $340, reflecting strong performance and market confidence [14] - The resilience of search revenue and significant growth in Google Cloud's backlog are key positive indicators for Alphabet's future [15][16] - The efficient utilization of older TPU technology suggests that Alphabet can maximize returns on its AI investments, further enhancing its competitive position [16]