Recent projections indicate that Meta Platforms’ advertising revenue could overtake Google Search’s ad revenue by 2026. Meta is forecasting a 30% year-over-year increase in its first-quarter ad sales, driven by the rollout of AI-enhanced targeting and automated creative tools. In contrast, Google Search ad growth is expected to remain in the mid-teens percentage range, though Alphabet’s broader advertising business—including YouTube and its partner network—will still be larger in absolute terms next year. Meta’s management has earmarked an additional $5 billion in R&D for AI initiatives this year, a move that analysts say could accelerate its revenue trajectory and narrow the gap with Google’s core search business.

Bank of America Securities analyst Justin Post has raised his fourth-quarter revenue forecast for Alphabet to $95.9 billion and earnings per share to $2.65, citing a surge in AI-related Search usage and stronger than expected YouTube ad performance. He now anticipates Search revenue growth of 15%–16% and YouTube growth of 14%–15%, both above consensus estimates. Post also lifted his capital expenditure outlook for 2026 by 14% to $139 billion, reflecting increased investment in data center expansion and AI infrastructure. With operating expenses projected at $28 billion and a margin expansion of 120 basis points, he maintains a Buy rating on the company, arguing that first-quarter commentary will be critical for investors.

In a significant legal victory for Alphabet, a federal judge in San Francisco rejected consumer requests for over $2 billion in penalties related to Google’s alleged collection of user data after privacy settings were disabled. The court found that plaintiffs failed to demonstrate willful misconduct under the key privacy statute and noted that Google had implemented a redesigned consent flow in 2020 to address prior concerns. The ruling preserves Alphabet’s balance sheet from a potentially material penalty and removes a major overhang on the stock, according to legal analysts, even as other regulatory challenges continue in Europe and the United States.