Alphabet GOOGL is a behemoth in the digital advertising market, in which Snap SNAP is the smaller challenger. Increasing deployment of AI and machine learning is driving content creation, while chatbots and virtual assistants are helping advertisers offer personalized user interactions and content personalization. These benefit both GOOGL and Snap stocks. Both are expected to benefit from growing digital advertising spending, which, per Statista, will account for 82.2% of total spending by 2030. However, Alphabet or Snap, which stock has an edge under the current scenario?
Alphabet’s advertising revenues are expected to benefit from strong search and YouTube advertising revenues. Google continues to dominate the Search business with more than 90% share, followed by Microsoft’s Bing, with 4.08% share, per the latest data from StatCounter.
Alphabet has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance. Alphabet is advancing visual and contextual search capabilities. The Circle to Search feature is now active on more than 300 million devices. The company is adding functionalities to help people explore complex topics and ask follow-up questions without switching apps.
Google’s AI-powered Search features are driving deeper engagement, with AI Mode offering advanced reasoning and multi-modal responses. Users are generating queries twice as long as those in traditional searches. GOOGL is expanding AI mode in Google Search by adding more than 35 languages and over 40 new countries and territories. AI Mode in Search is now expanded to more than 200 countries and territories.
AI is helping in improving YouTube recommendations and auto dubbing, which generates better returns for creators and brands by expanding the audience. The company launched Veo 3, photo to video and generative effects to shorts, making content creation easier. GOOGL’s efforts are attracting advertisers. In the past 12 months, YouTube ads viewed on CTV screens drove more than 1 billion conversions. YouTube’s expanding addressable market, driven by new services like shorts, which now averages more than 200 billion daily views, bodes well for Alphabet’s prospects.
Snap’s advertising platform is evolving with commerce-driven ad volume growing 39% year over year in the second quarter, and newer ad formats such as Sponsored Snaps are delivering stronger conversion outcomes. With campaign tools improving measurability and efficiency, Snap is seeing broader advertiser adoption. Snap’s advertising platform improvements have resulted in total active advertisers’ growth. In the second quarter of 2025, purchase volume for commerce advertisers increased 39% year over year, while total purchase-related advertising revenues grew more than 25% from the prior-year period.
Snap continues to evolve as a visual-first social media platform with strong traction among Gen Z users. Its global user base continues to expand, reaching 469 million Daily Active Users during the second quarter of 2025, up 8.6% year over year.
Premium experiences remain a key catalyst to Snap’s engagement strategy. The Snapchat+ subscriber base approached 16 million in the second quarter of 2025, supported by new offerings like Lens+, which gives access to AI-powered video effects and exclusive features. Snap’s AR tools, including Camera Kit and Spectacles, continue to differentiate it from its peers by enabling immersive experiences across both consumer and enterprise use cases.
However, Snap is suffering from stiff competition, with U.S. time spent on Snapchat plummeting nearly 14% year over year in June 2025, exposing the platform’s inability to retain user attention, which is a headwind.
