Meta Platforms and Alphabet both reported better-than-expected revenue growth for their latest quarters amid a strong digital advertising backdrop, but a Loop Capital analyst is bullish on just one of those tech firms moving forward.

Rob Sanderson increased his price target for Meta to $980 from $888 on Tuesday and reiterated a Buy rating on shares. That new price target implies a 26% increase from the stock’s last closing price of $776.37.

Meta’s second-quarter results not only beat earnings and revenue estimates, but the company also provided strong revenue guidance for the third quarter as advertisers continue to spend big.

“The meaningful revenue growth acceleration and strong outlook from Meta was the biggest positive surprise of mega-cap earnings,” Sanderson wrote in a research note.

Shares of the Facebook and Instagram parent were down 1.7% on Tuesday. The stock has risen 30% this year and 55% over the past 12 months.

“Reports position Meta’s recent hiring spree and capex expansion as an effort to ‘catch up’, but business results reinforce our view that the company is the largest non-hardware beneficiary,” Sanderson said. The company said on its last earnings call that it expects to ramp up investments for artificial intelligence “significantly in 2026.” Meta has also been on a hiring spree to try to bring in the best talent to help push the company to the front of the AI race.

“Efforts like business AIs, personal AI assistants, wearables, open-source models, etc. are each very meaningful long-term opportunities,” Sanderson added.

Sanderson also raised his price target on Alphabet to $190 from $165 on Tuesday, which implies a 2.6% decrease from the stock’s last closing price of $195.04. However, he maintained a Hold rating on shares.

“While resilience in near-term results and higher estimates warrants a higher share price, we do not expect this will change longer-term secular concerns,” Sanderson said.

Shares of Alphabet were down 0.2% on Tuesday. The stock has gained 3% this year and 24% over the past 12 months.

Alphabet also reported better-than-expected second-quarter financials, but headwinds that have kept the stock underperforming the broader market this year persist. For one, Wall Street is concerned that the introduction of large language models (LLMs) will have lasting effects on Google’s search market share. Barron’s has previously reported that since the introduction of LLMs and AI answers to search queries, fewer people are clicking on links to other websites in google search results.

“The problem for the business, and for the stock, is dependence on its monopoly in search marketing as user behavior is rapidly moving to LLMs for information seeking,” Sanderson said.

A federal judge ruled in August 2024 that Google maintained a monopoly in general search services and general text advertising. Google is now days away from learning what remedies a judge will order the company to adopt to mitigate that monopoly. That could mean Google gets broken up, or the company gets forced to end exclusive search engine agreements with smartphone makers like Apple.

“Despite consistency in results, we think the Google shares will continue to underperform other tech heavyweights,” Sanderson said. “Any hiccup in search monetization or the Apple partnership would likely cause a sharp decline in the stock price.”