Meta, Google, Amazon: Why Smart Money is BUYING the Dip

While short-term tariff fears have battered tech stocks, three industry giants stand out as compelling long-term investments. Meta, Alphabet, and Amazon represent rare buying opportunities despite recent sell-offs.

Meta: The Social Media Juggernaut You Can't Ignore

Meta Platforms owns three of the largest social media platforms in the world: Facebook, Instagram, and WhatsApp. Last quarter, 3.35 billion people used a Meta service every day. Excluding China-where Meta does not operate-that is over half of the world's population using a Meta product daily. This incredible global scale is rivaled only by Alphabet.

Even though other social media platforms like Snapchat or Pinterest have hundreds of millions of users, no other application besides TikTok comes close to Meta’s scale in terms of time spent and advertising expertise. Last quarter, Meta’s revenue grew 21% year over year to $48 billion, with operating margin expanding from 41% to 48%. This led to a 43% year-over-year increase in operating income for the quarter, one of the fastest growth rates among large technology companies.

Meta is heavily investing in artificial intelligence, virtual reality, and other research projects, ensuring it stays ahead as new technology paradigms emerge. CEO Mark Zuckerberg is committed to winning market share in AI and mixed reality hardware, spending tens of billions of dollars annually to stay ahead of the competition. Even with all this research spending, Meta maintains a 48% operating margin-a testament to its incredible business model.

Meta’s trailing price-to-earnings ratio has fallen to 22, down 26% from all-time highs. Even if 2025 is rough due to tariff uncertainty, Meta is a great stock to own today because of its solid business model and founder-led focus on innovation.

Alphabet: The Search Engine Transforming Into an AI Powerhouse

Alphabet, the owner of Google Search, YouTube, Google Cloud, and Waymo, is also down 21% from all-time highs, even after a recent earnings bump. Despite worries about AI competitors, Alphabet’s business continues to shine. Google Search and other segment revenue grew 10% year over year to $51 billion. YouTube advertising revenue grew 10% to $8.9 billion, and Google Cloud grew 28% to $12.3 billion. Alphabet’s operating margin expanded to 34% last quarter, up from 32% a year ago.

Alphabet’s future looks promising. Its Gemini AI tools are growing, and its self-driving robotaxi network Waymo recently hit 250,000 weekly rides, up fivefold from a year ago. With a P/E ratio of 20, Alphabet is a fantastic technology business to buy and hold for many years.

Amazon: The E-Commerce Revolution Entering Its Profit Phase

Amazon is another technology giant down 20% from highs. Unlike Alphabet and Meta, Amazon does not generate sky-high profit margins today, but it is likely heading for significant profit expansion over the next five years. This is why its P/E ratio looks slightly high at 34, even though its true earnings potential should be realized soon.

Amazon’s e-commerce marketplace has evolved. Instead of making money by holding inventory and selling goods itself, Amazon now focuses on managing transactions for third-party sellers. It also has a high-margin advertising business generating $56 billion in revenue and subscription revenue hitting $44 billion a year. This shift means Amazon’s e-commerce business has much higher margin potential than in the past, and this is gradually being reflected in its profit margins. North American retail margins were just 6.4% in 2024, with room to grow significantly higher than 10% in the coming years.

Amazon Web Services (AWS), the cloud infrastructure giant, generates over $100 billion in revenue and had a 37% operating margin in 2024. Combined with rising margins in e-commerce, Amazon’s consolidated profit margins could grow from 11% last year to 15% or even 20% within the next few years.

As revenue and profit margins rise, Amazon’s earnings should increase dramatically. At $750 billion in future revenue-up from $638 billion last year-a 20% profit margin would mean $150 billion in annual income. With a current market cap of $2 trillion, $150 billion in earnings would bring the P/E ratio down to 13.3 based on today’s stock price. This makes Amazon stock look cheap for those looking to buy and hold for many years.