**Key Points on AI Impact in Advertising**
Meta Platforms (NASDAQ: META) and Alphabet (NASDAQ: GOOGL) are significantly leveraging artificial intelligence (AI) to enhance their advertising capabilities, leading to substantial revenue growth. In the last reported quarter, Meta saw a 26% year-over-year revenue increase, largely attributed to improved ad targeting through AI. Consensus earnings estimates suggest an annualized growth rate of approximately 16% for Meta.
Similarly, Alphabet reported $385 billion in total trailing revenue, with nearly 75% generated from advertising, resulting in a net profit of $124 billion last year. In Q3, Alphabet’s search revenue reached $56 billion, marking a 14% increase year-over-year. This growth is bolstered by AI-driven tools like Google Ads’ Performance Max, which significantly enhance conversion rates for advertisers. Analysts forecast a 15% annualized earnings growth for Alphabet, setting a forward P/E at 29.
