Tech Stocks Worth Buying: How AI Is Revolutionizing Meta and Alphabet's Core Business in 2026

Artificial intelligence is no longer just a futuristic concept—it’s fundamentally reshaping how two of the world’s largest technology companies generate revenue. Meta Platforms and Alphabet stand out among tech industry leaders not because they’re riding the AI hype, but because they’ve already embedded artificial intelligence into their most profitable business lines. For investors seeking stocks to buy that combine growth potential with reasonable valuations, these two companies warrant serious consideration.

How Artificial Intelligence Is Transforming Advertising Economics

The real story here isn’t about experimental AI features. It’s about AI driving tangible business results in the advertising sector, where both Meta and Alphabet derive the majority of their earnings.

When advertisers can target users more precisely and predict which ads will convert, they spend differently. They spend more—and they’re willing to pay premium prices for platforms that deliver results. This is the crucial dynamic that Wall Street analysts are increasingly recognizing: AI isn’t just improving user experience; it’s dramatically improving advertising returns, which directly translates to higher revenue per ad and stronger pricing power for the platforms themselves.

Meta Platforms: Converting AI Capabilities Into Advertising Revenue Growth

Meta Platforms operates one of the world’s most valuable advertising networks, with over 3 billion users across Facebook, Instagram, and related services. The company isn’t just adding AI features—it’s weaponizing AI to make its ad platform substantially more effective.

The evidence is in the numbers. Meta’s latest quarterly results showed a 26% year-over-year revenue increase, driven significantly by AI-enhanced ad targeting and recommendation systems that help marketers achieve better results on their ad spending. This improved advertiser ROI then justifies higher pricing for ad placements.

From a valuation perspective, this growth story appears underappreciated. Wall Street consensus estimates project roughly 16% annualized earnings growth over the next several years. At the current forward price-to-earnings multiple of 21 based on a share price around $646, this growth rate suggests the market may be overlooking Meta’s durable competitive advantages in advertising.

Management’s aggressive spending on AI infrastructure raises questions about near-term margins, but this investment thesis makes strategic sense: better AI systems create better ad targeting, which drives better advertiser results, which enables higher pricing. Patient investors willing to look past near-term profitability concerns may find an opportunity to acquire exposure to a technology giant at an attractive valuation.

Alphabet (Google): Profitability and AI-Driven Ad Revenue Momentum

Alphabet generates an enormous and highly profitable business from advertising, with nearly three-quarters of its trailing revenue of $385 billion coming directly from ads. Google Search, YouTube, Google Maps, and other Alphabet services collectively generate the most valuable advertising streams in the industry.

The company’s recent financial performance demonstrates why this business remains so powerful. In the third quarter, Search revenue alone reached $56 billion, up 14% year-over-year. These aren’t marginal gains—they reflect genuine market share strength and pricing power, particularly as Google’s AI systems improve ad matching and conversion rates.

A concrete example illustrates the advertiser-side benefit. SoFi Technologies utilized Google Ads’ Performance Max tool and achieved a 39% year-over-year increase in conversion volume during the third quarter. This kind of return on advertising investment explains why Google continues to command premium pricing and market share.

Alphabet’s annual net profit of $124 billion demonstrates the sheer profitability of this business model. That profit fuels continuous AI investment, which improves user experience and ad targeting, perpetuating the growth cycle.

Valuation-wise, Alphabet trades at a forward price-to-earnings ratio of 29, which is reasonable for a company of this quality and profit-generation capability. Analyst consensus calls for 15% annualized earnings growth, suggesting the potential to double the stock price within a five-year horizon.

The Investment Case: Why These Stocks Deserve Consideration

Both Meta and Alphabet share a common narrative: they’re profiting from AI implementation in their core advertising businesses. Unlike speculative AI plays, these companies have decades of advertising expertise, vast user bases, and proven business models that are being enhanced—not replaced—by artificial intelligence.

The market has recognized these as growth stocks to buy, yet they still trade at multiples that offer attractive entry points for long-term investors. For those building portfolios in 2026, understanding why these technology giants merit positions in your holdings requires understanding the AI-driven economics of modern digital advertising.

The opportunity lies not in picking winners among unproven AI companies, but in identifying established market leaders whose profitability and competitive moats are being strengthened by intelligent systems. By that measure, Meta Platforms and Alphabet represent compelling stocks worth investigating for your portfolio.