Poor Alphabet Inc. (GOOG) (GOOGL) . Shares of the $645 billion internet giant have "only" added 19% to their market value so far in 2017, taking up the rear compared to the firm's hotly watched FAANG peers.
While Alphabet's double-digit rally has added around $100 billion to its market capitalization since the calendar flipped to January, other tech titans have dwarfed that. The other FAANG stocks -- Facebook (FB) , Apple (AAPL) , Amazon.com (AMZN) , and Netflix (NFLX) -- have all rallied between 31% and 48% so far this year.
Facebook's massive 48% upside move has created approximately $60 billion more value than Alphabet's run. And Apple's breathtaking 38% rally has generated $231 billion in new value for shareholders this year -- or more than a third of the total market cap of Alphabet itself.
All that wealth creation makes it easy to forget that Alphabet is still the dominant name in online ads -- and that's not changing even if Facebook is playing catch-up.
Make no mistake. Alphabet -- parent company to Google as well as the smart-home-tech maker Nest, the healthcare research arm Verily, secret R&D unit Google X, and a handful of other businesses -- is still an advertising company. Google itself generates approximately 99% of Alphabet revenue, and almost 88% of that is generated by online advertising.
And that core advertising business continues to grow at double-digit rates despite its massive scale.
Google generated almost $12 billion more ad revenue in the last year, more than the $9.7 billion in revenue growth that Facebook managed to pull off. Even though Facebook's revenue bump in the last year was a bigger chunk of the younger company's total revenue, Alphabet's massive scale makes its ability to pull off such substantial growth rates all the more impressive.
Ultimately, it's not an either-or call.
Both companies have ample runway ahead, particularly as they leverage their substantial user ecosystems and new machine-learning technologies to offer advertisers more targeted ad products than were available just a few years ago -- at rates that reflect that high level of sophistication.
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