Meta on Track to Surpass Google in Digital Ad Revenue by 2026

Bernstein analysts predict Meta will overtake Google in digital ad revenue by 2026, citing impressive growth and competitive positioning. Meta's ad performance was particularly strong, capturing 200 basis points of market share and growing at 9% YoY in North America. Google's paid clicks growth rose to 4% YoY, delaying concerns about AI disruption. The broader internet sector has regained favor among investors due to strong digital ad results, with Meta leading the charge.

Bernstein analysts have issued a bullish outlook on Meta Platforms (NASDAQ: META), predicting that the social media giant will surpass Google (NASDAQ: GOOGL) in digital ad revenue by the end of 2026. This prediction is based on Meta's impressive growth and strong competitive positioning in the digital advertising market.

In Q2 2025, Meta captured approximately 200 basis points of market share and grew at a 9% year-over-year (YoY) rate in North America, according to Bernstein analysis [1]. This growth was driven by increased user engagement and improved ad effectiveness. In contrast, Google's paid clicks growth rose to 4% YoY, delaying concerns about AI disruption [2].

Meta's ad performance has been particularly strong, with the company capturing 45% of every incremental digital ad dollar in Q2 2025. This growth comes as Alphabet, the parent company of Google, maintains its dominant position with robust revenue growth of 13% over the last twelve months. However, Alphabet's growth is expected to be outpaced by Meta's aggressive expansion in digital advertising [1].

The broader internet sector has regained favor among investors due to strong digital ad results, with Meta leading the charge. Meta's revenue grew 22% year-over-year in Q2, with Q3 revenue guidance of $47.5-50.5 billion, representing 17-24% year-over-year growth. This guidance exceeded market expectations [1].

Meta's AI-driven growth has not gone unnoticed by investors and analysts. While Google has faced regulatory scrutiny and competition from other tech giants, Meta has been able to capitalize on its strong user base and innovative ad targeting technologies. However, Meta's AI ambitions come with their own set of challenges, including escalating regulatory risks and compliance costs [2].

Investors should keep a close eye on Meta's ability to balance innovation with profitability. Despite strong earnings, the company's AI investments have driven significant capital expenditures, straining its Reality Labs division. Meta plans to spend $66–$72 billion on AI and infrastructure in 2025, with further increases expected in 2026 [2].

In conclusion, Bernstein analysts' prediction of Meta overtaking Google in digital ad revenue by 2026 is supported by the company's impressive growth and strong competitive positioning. However, investors must also consider the challenges posed by regulatory risks and compliance costs. As Meta navigates these challenges, its ability to maintain its growth trajectory will be crucial for its long-term success.

References:
[1] https://www.investing.com/news/analyst-ratings/meta-stock-gains-ground-on-digital-ad-dominance-bernstein-sees-google-catchup-by-2026-93CH-4210855
[2] https://www.ainvest.com/news/meta-ai-regulatory-risk-strategic-rebalancing-navigating-safeguards-political-scrutiny-protect-growth-valuation-2508/