With the Federal Reserve still hiking interest rates, a tighter monetary policy that started more than a year ago to fight high levels of inflation, many executives are preparing for worse times ahead. And when this is the case, spending on marketing initiatives is one of the first things to be cut. If management teams expect sales to be under pressure in the near future, why waste money on advertising that could be used for more pressing corporate matters? 

This situation has been very pronounced in the digital advertising market, which showed a notable slowdown last year. The good news, though, is that it hasn’t been as bad as one would think. Digital ad revenue in the U.S. was up 10.8% in 2022 to $210 billion after rising 35.4% in 2021. That’s still a healthy gain, no doubt. 

But the leaders in the industry, Alphabet (GOOGL -1.75%) (GOOG -1.61%), Meta Platforms (META -1.62%), and Amazon (AMZN 1.55%), have seen their stock prices plummet, and they are still well off their all-time highs. This presents investors with a rare opportunity. Here’s why these three FAANG stocks are screaming buys today. 

Leaders in digital advertising 

It’s hard to ignore just how dominant these businesses are. Alphabet’s most important service, Google Search, commands 93% of the global market, a share that has increased in recent months even with the rise of ChatGPT and its integration with Microsoft‘s Bing search engine. Alphabet’s other leading properties, like YouTube and Android, for example, help the business collect even more valuable data that can be used to improve ad capabilities. Alphabet generated $224 billion of ad revenue in 2022, up 7% year over year. 

Everyone knows Amazon for its massive e-commerce operations. According to Statista, the company had a 38% market share of online shopping in the U.S. as of June 2022. What’s more, you’ve likely heard of Amazon Web Services, the leading cloud infrastructure provider. However, Amazon has a burgeoning digital ad segment, which increased revenue by 23% in the fourth quarter of 2022 to $11.6 billion, giving the company about 7% worldwide market share. Having 3 billion visitors to the website in March certainly helps its prospects.

With Meta, perhaps no other topic has garnered more attention than the popularity of TikTok, which has 150 million monthly active users in the U.S. But Meta is still a force to be reckoned with. As of Dec. 31, 2022, the social media powerhouse counted a jaw-dropping 2.96 billion daily active users across its family of apps, a figure that continues rising each year. And with 2022 digital ad revenue of $114 billion, Meta is still a top dog in the space. 

Poised to benefit from a stronger economy 

Combined, Alphabet, Amazon, and Meta controlled 60.6% of the U.S. digital ad market in 2022. This was down from a 61.6% share in 2021. This might be cause for concern, but I’m not too worried about it at this point. The digital ad market is expected to be worth $1.5 trillion by the year 2023, leaving plenty of opportunity for the main players in the industry to continue growing. 

For advertising executives who are looking at what digital properties they should direct their dollars toward, it’s hard not to be attracted to the sheer dominance and reach of these three businesses. Sure, technology is constantly changing, and where consumers spend their time and attention can shift over time. But Alphabet, Amazon, and Meta are well positioned to capitalize on whatever direction the world goes in. And thanks to their massive scale and data advantages, they should be able to compete with whatever hot new upstart enters the market. This gives me confidence that once the economy gets back on a strong footing, these businesses will benefit greatly. 

Selling at attractive valuations 

All three of these stocks are trading at prices that are substantial discounts to their all-time highs. Alphabet is off 30% from its peak and now trades at a price-to-earnings (P/E) ratio of 23. Amazon is off 40% from its peak and now trades at a price-to-sales multiple of 2.1. And Meta is off 44% from its peak, and it now sells at a P/E of under 25. 

It’s hard to pass up on an opportunity like this to buy three outstanding businesses that are selling at attractive prices. While most market participants tend to fixate on the short term, it’s worthwhile to keep your eyes on the next few years. And with this perspective, these three stocks look like no-brainer buys right now. 

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Neil Patel has positions in Alphabet, Amazon.com, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.


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