Loop Capital analyst Rob Sanderson is “increasingly optimistic” about Meta Platforms’ (META) position and remains uncertain about Alphabet’s (GOOGL) Google’s. Generative artificial intelligence appears to have open-ended potential for the technology sector “and the arms race is fully on,” the analyst tells investors in a research note. The firm says the path to generating return on investment, revenue models and timeframe are still big questions for investors. Loop believes Meta’s strategy to advance AI tools for creators and businesses is taking shape and “makes a lot of sense.” Meta also appears to be spending meaningfully more on tech infrastructure than Google, perhaps 50% to 60% more over the last two years, according to the firm. Loop says Alphabet’s historic valuation premium has shifted to now favor Meta slightly. The valuation delta will increasingly favor Meta over the next several quarters and likely the next few years, the firm contends. It reiterates a Buy rating on Meta with a $550 price target and Hold rating on Alphabet with a $170 price target.