The smartest investors pay attention to the major trends shaping the economy and markets.
One of the biggest themes in the stock market over the past decade has been the monster growth of the technology sector. Companies within the space are known to be innovative, adopting strategies to disrupt various industries, attract huge user bases, and keep growing their revenues. Investors would be wise not to ignore this trend. So if you have $5,000 ready to invest, consider buying and holding Alphabet (GOOGL +0.75%) (GOOG +0.72%) and Meta Platforms (META +1.42%) for the long term.
Image source: Getty Images.
Massive user bases support network effects
Alphabet has six products and services that each have at least 2 billion users. Meta’s various social media platforms combined boast a whopping 3.58 billion daily active users. That gives both of these tech companies unrivaled reach, and shows just how ingrained they are in people’s lives.
With that type of scale, it’s clear these business models benefit from powerful network effects, giving them wide moats. With Alphabet, its Google Search and YouTube empires are constantly getting better as they add more users, queries, and content, which helps to improve the experience. Meta’s Facebook and Instagram, for instance, become more valuable as more people use them, since that enables more connections to be made and results in more content being generated.
This creates a positive feedback loop. And it makes the competitive positions that Alphabet and Meta have built virtually impossible to disrupt.
Today’s Change
(0.75%) $2.42
Current Price
$325.28
Key Data Points
Market Cap
$3.9T
Day’s Range
$317.30 – $326.18
52wk Range
$140.53 – $349.00
Volume
811K
Avg Vol
37M
Gross Margin
59.68%
Dividend Yield
0.26%
Operating with strong financial positions
Investors considering a stock should never look past the company’s financial situation. With these two businesses, though, there isn’t much of a reason to worry.
Alphabet and Meta reported impressive operating margins of 32% and 41%, respectively, in the fourth quarter of 2025. They have strong balance sheets, with Alphabet holding $127 billion in cash, cash equivalents, and marketable securities, while Meta holds $78 billion. These figures are significantly higher than their respective debt burdens. This setup will provide them with a safety net should the broader economy or the digital ad industry take an unexpected turn for the worse.
Meta Platforms
Today’s Change
(1.42%) $9.41
Current Price
$670.87
Key Data Points
Market Cap
$1.7T
Day’s Range
$658.83 – $670.89
52wk Range
$479.80 – $796.25
Volume
427K
Avg Vol
18M
Gross Margin
82.00%
Dividend Yield
0.32%
Reasonable valuations present a good entry point
Despite being two of the most dominant businesses in the world, their stocks aren’t expensive today, especially if you believe that they can continue to grow their profits at double-digit percentage rates.
Alphabet’s stock trades at a price-to-earnings ratio of about 30. That’s a bit steeper than Meta’s multiple of about 28, but I believe both are reasonable valuations for investors to pay.
Based on their closing stock prices on Friday, investors can buy seven shares of Alphabet and four shares of Meta for just under $5,000.