JPMorgan Removes Alphabet from Analyst Focus List, Adds Meta Platforms Citing AI‑Driven Advertising Growth

JPMorgan reshuffled its Analyst Focus List on Monday, removing Alphabet and adding Meta Platforms, which leaves AMZN and META as the bank's preferred picks across its internet coverage. Analyst Doug Anmuth wrote that "coming out of 3Q earnings, Meta's relative advertising strength is more evident than ever." Meta's advertising revenue rose 26% year over year in the third quarter, with North American growth accelerating to 33%, and JPMorgan estimates the company added about $13 billion in incremental ad revenue, roughly twice the new dollars generated by Google Search. The bank expects Meta's Family of Apps ad revenue to surpass Google Search from the fourth quarter onward.

The move is a focus-list change, not a downgrade: JPMorgan kept its Overweight rating on GOOGL. Its concern is the pace of AI monetization in search. Google Search revenue growth slowed to 12% in the third quarter from 19% in the first and 17% in the second, free cash flow was negative for a second straight quarter, and management held its 2026 capital expenditure forecast at $195 billion to $205 billion with a significant increase planned for 2027. Google Cloud remains the bright spot, with revenue up 103% and a $561 billion backlog, though JPMorgan noted that TPU system sales contributed meaningfully to growth without separate disclosure of their revenue or margins.

Investors bought the whole group anyway. Meta traded at $637.77, up 5% shortly after the open, Amazon was up 5% at $272.27, and Alphabet rose 3% to $293.71 despite losing its spot. JPMorgan pointed to Amazon Web Services revenue growth of 39% in the third quarter and Amazon's expectation of AWS growth above 40% in both 2027 and 2028. Beyond core ads, the bank highlighted Meta's Muse assistant, with 10 million sign-ups in the U.S. and Canada, and an enterprise opportunity in Meta Model API and Muse Code.

The test JPMorgan has set is concrete: whether Meta's Family of Apps ad revenue actually passes Google Search in the fourth quarter. On the other side, faster AI search monetization or continued Cloud strength could make the Alphabet removal look premature, while Meta carries the heaviest legal and regulatory burden of the three and has no cloud or retail business to absorb its AI capital spending.