The markets may be going a bit crazy now as oil plummets and takes stocks with it, but select big tech isn’t a part of this noise.
Facebook (FB) and other online giants aren’t sweating growth in China or a weak Europe. Instead, they’re battling one another for dominance over a massive long-term shift in advertising dollars.
Currently, Alphabet (GOOGL, GOOG) is the dominant force in digital advertising. But, FB has been working very hard to wrest that title away from GOOG.
FB raked in $4.3 billion in digital ad revenue in Q3; GOOG received about $18.7 billion. FB’s growth makes headlines for its 41% jump in revenue compared to the same year ago quarter. But as you can see, it’s going to need a lot of those jumps to catch GOOG, much less surpass it.
That’s not really the point, though. FB is making significant strides, and it’s working across all is social media and messaging services. GOOG remains the most visited site in the world, but FB is No. 2.
This is a big deal because FB stock is more than just Facebook; it’s Instagram, WhatsApp, and Messenger. The company is also launching the virtual reality headset Oculus Rift in coming months. The point is, FB is diversified across its audience, and those specific channels will likely help grow its advertising dollars increasingly quickly.
Facebook Is Expanding Beyond Just Social Media
Management is also looking to move into the health monitoring marketplace using technology from its ProtoGeo Oy acquisition. This is already a booming sector that’s sure to grow dynamically in coming years.
Additionally, there is a lot of buzz about FB’s new efforts to secure the burgeoning online-to-offline space. That’s where a business gets to know a customer online, and the customer purchases products from the business that are subsequently delivered to the customer’s house.
Facebook is the perfect platform to broker those relationships because, while its users skew older, the older crowd has the money to spend online.
This could be a game-changer since GOOG has no real way to compete with this aspect of the new digital retail model. Amazon (AMZN) has yet to develop a platform for this, either, which leaves FB in a very good position to establish dominance over potential competitors, further rewarding Facebook stock in the long term.
The point is, FB stock may ride the tide of the market swings, but management has a plan that isn’t tied to issues in the marketplace. The long-term trend is moving in the direction of Facebook stock, not away from it.
These kinds of chaotic episodes are a great opportunity for smart investors to get in and buy Facebook stock at a great price. FB is off about 13% year to date, through no fault of its own. That makes now a great time to buy for what’s to come in 2016 and beyond.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
