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Internet stocks Meta Platforms Inc. and Alphabet Inc. logged their highest closes in more than a year as they continued their October rally.
Meta shares
META,
rose 1.9% Tuesday to finish at $327.82. That made for their highest close since Jan. 14, 2022, when they ended at $331.90, according to Dow Jones Market Data.
Shares of Alphabet
GOOG,
GOOGL,
advanced 1.8% to close at their highest level since April 5, 2022, when they finished at $140.59. Alphabet’s stock ended Tuesday’s session at $140.55.
Both stocks have rallied so far in October, with Meta shares up 9.2% on a month-to-date basis and Alphabet shares up 7.4%.
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Meta and Alphabet are set to report third-quarter results in the coming weeks, and analysts see healthy enough trends in the online-advertising market.
“From an industry perspective, we would highlight that [third-quarter] 2023 digital ad trends continue a pattern of improving growth trends that has been a hallmark of the progression [through] 2023,” Goldman Sachs’s Eric Sheridan said in a note to clients earlier this month. He added that companies generally should see easier comparisons and “steady sequential improvement in brand advertising,” among other positive drivers.
Piper Sandler analyst Thomas Champion called Meta his top pick heading into internet earnings season, given the potential for growth in impressions, benefits from artificial intelligence and improvements in advertising technology.
“For the stock to work, we believe Meta will need to put up at least 20% growth for [the third quarter] plus [fourth-quarter] guidance in the low-mid 20s … growth range” on a percentage basis, he wrote Monday. “Our seasonality analysis suggests all this is doable and [fourth quarter] is a low bar.”
As for Alphabet, Champion thinks the stock’s move will depend on management’s commentary on the core search business and progress on cost cuts.
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