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GOOGL Rides on Strong Advertising Revenues: Can It Beat RDDT and META?
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Key Takeaways
Alphabet's Q2 Google ad revenues rose 14.4% to $81.63B, led by Search and YouTube growth.
Gemini-powered AI Max has 500,000 advertisers and delivers 15% more conversions or value on average.
Alphabet faces tougher Q3 Search comparisons and an FX headwind, but Gemini and YouTube remain supports.
Alphabet (GOOGL - Free Report) is benefiting from strong momentum across its advertising business, supported by continued growth in Google Search and YouTube and deeper integration of Gemini across its ad infrastructure. This strength reinforces Alphabet’s competitive position in digital advertising against Reddit (RDDT - Free Report) and Meta Platforms (META - Free Report) .
Google advertising revenues increased 14.4% year over year to $81.63 billion in the second quarter of 2026. Google Search & other revenues jumped 17% to $63.27 billion, while YouTube advertising revenues increased 13% to $11.06 billion. Retail and finance were the biggest contributors to Search growth, while direct response and brand advertising supported YouTube.
Alphabet’s growing use of Gemini across its advertising infrastructure remains a key catalyst. Gemini helps understand longer and more detailed searches. In the second quarter of 2026, shopping ads achieved a 20% improvement in showing highly relevant advertisements. AI Max has already been adopted by 500,000 advertisers, with AI-powered campaigns generating an average 15% more conversions or value at a similar return on ad spend.
YouTube further strengthens GOOGL’s competitive position against Reddit and Meta Platforms through its combination of connected TV, Shorts, creators and direct-response advertising. Continued innovation in AI-driven targeting, shoppable formats and Search monetization should help Alphabet capture a greater share of advertising budgets despite intense competition.
Alphabet expects AI-driven improvements in Search to continue supporting user and advertiser experiences. However, third-quarter growth will face tougher Search comparisons and a slight foreign-exchange headwind, particularly across Search and YouTube ads. Despite the headwinds, continued Gemini integration, rising Search engagement and expanding YouTube monetization are expected to support advertising growth and help GOOGL compete effectively with RDDT and META.
How Competitors Fare Against GOOGL
Despite Alphabet’s expanding portfolio, the company faces stiff competition from Reddit and Meta Platforms. Both companies are expanding their footprint in the rapidly growing digital ad market.
Reddit is benefiting from strong demand in its advertising business, which has become a key growth driver of the company’s impressive financial performance and future growth prospects. In the second quarter of 2026, Reddit’s advertising revenues grew 64% year over year to $762 million, outpacing even its impressive total revenue growth of 61%. This growth is broad-based, with strength across various sales channels, including large customers, mid-market and small and medium-sized businesses.
Meta’s strong growth in its advertising business has been noteworthy. In the second quarter of 2026, Meta reported $59.4 billion in ad revenues, up 27% year over year, with a 14% increase in ad impressions and a 12% rise in average price per ad. This growth is underpinned by Meta’s ability to deliver highly engaging experiences across its platforms, which include Facebook, Instagram, WhatsApp and Threads.
Alphabet shares have risen 9.3% year to date, underperforming the broader Zacks Computer and Technology sector’s growth of 15.4%.
GOOGL Stock Performance
Image Source: Zacks Investment Research
GOOGL stock is trading at a premium, with a forward 12-month price/sales of 8.31X compared with the broader Computer and Technology sector’s 6.32X. Alphabet has a Value Score of D.
GOOGL Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $20.51 per share, which has increased 1.73% over the past 30 days. This suggests 89.73% growth from 2025’s reported figure.
View the Zacks #1 Rank List
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GOOGL Rides on Strong Advertising Revenues: Can It Beat RDDT and META?
Key Takeaways
Alphabet (GOOGL - Free Report) is benefiting from strong momentum across its advertising business, supported by continued growth in Google Search and YouTube and deeper integration of Gemini across its ad infrastructure. This strength reinforces Alphabet’s competitive position in digital advertising against Reddit (RDDT - Free Report) and Meta Platforms (META - Free Report) .
Google advertising revenues increased 14.4% year over year to $81.63 billion in the second quarter of 2026. Google Search & other revenues jumped 17% to $63.27 billion, while YouTube advertising revenues increased 13% to $11.06 billion. Retail and finance were the biggest contributors to Search growth, while direct response and brand advertising supported YouTube.
Alphabet’s growing use of Gemini across its advertising infrastructure remains a key catalyst. Gemini helps understand longer and more detailed searches. In the second quarter of 2026, shopping ads achieved a 20% improvement in showing highly relevant advertisements. AI Max has already been adopted by 500,000 advertisers, with AI-powered campaigns generating an average 15% more conversions or value at a similar return on ad spend.
YouTube further strengthens GOOGL’s competitive position against Reddit and Meta Platforms through its combination of connected TV, Shorts, creators and direct-response advertising. Continued innovation in AI-driven targeting, shoppable formats and Search monetization should help Alphabet capture a greater share of advertising budgets despite intense competition.
Alphabet expects AI-driven improvements in Search to continue supporting user and advertiser experiences. However, third-quarter growth will face tougher Search comparisons and a slight foreign-exchange headwind, particularly across Search and YouTube ads. Despite the headwinds, continued Gemini integration, rising Search engagement and expanding YouTube monetization are expected to support advertising growth and help GOOGL compete effectively with RDDT and META.
How Competitors Fare Against GOOGL
Despite Alphabet’s expanding portfolio, the company faces stiff competition from Reddit and Meta Platforms. Both companies are expanding their footprint in the rapidly growing digital ad market.
Reddit is benefiting from strong demand in its advertising business, which has become a key growth driver of the company’s impressive financial performance and future growth prospects. In the second quarter of 2026, Reddit’s advertising revenues grew 64% year over year to $762 million, outpacing even its impressive total revenue growth of 61%. This growth is broad-based, with strength across various sales channels, including large customers, mid-market and small and medium-sized businesses.
Meta’s strong growth in its advertising business has been noteworthy. In the second quarter of 2026, Meta reported $59.4 billion in ad revenues, up 27% year over year, with a 14% increase in ad impressions and a 12% rise in average price per ad. This growth is underpinned by Meta’s ability to deliver highly engaging experiences across its platforms, which include Facebook, Instagram, WhatsApp and Threads.
GOOGL’s Share Price Performance, Valuation & Estimates
Alphabet shares have risen 9.3% year to date, underperforming the broader Zacks Computer and Technology sector’s growth of 15.4%.
GOOGL Stock Performance
Image Source: Zacks Investment Research
GOOGL stock is trading at a premium, with a forward 12-month price/sales of 8.31X compared with the broader Computer and Technology sector’s 6.32X. Alphabet has a Value Score of D.
GOOGL Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $20.51 per share, which has increased 1.73% over the past 30 days. This suggests 89.73% growth from 2025’s reported figure.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Alphabet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.