During the most recent earnings season, a report from Morgan Stanley pointed out that Alphabet, Google's parent company, is projected to strategically surpass its rival, Meta. This projection is based on Alphabet's better-than-anticipated financial results and upward revisions to its earnings estimates. Google's main revenue streams, encompassing search, YouTube, and Google Cloud, all surpassed their projected growth rates. In response to these strong results, Morgan Stanley has increased its target price and earnings-per-share forecasts for the fiscal years 2026 - 2027. On the flip side, Meta's performance "strategically fell short of expectations." Its revenue guidance was insufficient to bolster investor confidence, and escalating costs have raised concerns about the return on investment. As a result, Morgan Stanley has lowered its target price and earnings projections for Meta. Google Cloud exhibited a strong performance, marked by a substantial rise in backlog orders and promising growth prospects. Conversely, Meta is struggling to strike a balance between investment and returns. The increased spending by Meta has dampened market expectations. Ultimately, the deciding factor in this competition will be which company first launches a more revolutionary next-generation AI model. Google's prospects hinge on the release of Gemini 3 by the end of the year, while Meta will face a test with its Llama reasoning model or its next-generation frontier model, which is scheduled for 2026.