E-commerce and digital advertising spending will accelerate in 2024, setting up a strong year for Amazon stock, as well as Meta Platforms, Uber and Booking Holdings, Wedbush analysts said Wednesday.
Wedbush analysts named their top internet stock picks for 2024 in a note to clients, saying while most internet stocks had a down year in 2022 and entered this year facing uncertainty, they see a more upbeat picture in 2024.
"We expect more normalized growth rates for e-commerce and digital advertising in 2024 with both industries positioned to accelerate next year," wrote a team of Wedbush analysts led by Scott Devitt.
Amazon Stock: Top E-Commerce Pick
Among the top picks, Wedbush sees the highest overall upside for Amazon stock. The firm's 12-month target price of 210 for Amazon stock — unchanged from a client note last week — implies 37% upside from Tuesday's closing price.
"Amazon is our top pick across our internet coverage, and we think the company is well positioned for 2024 as retail margins continue to rise, (Amazon Web Services) accelerates against easing comps, and advertising revenue growth continues to materially outperform the broader digital advertising industry," Devitt wrote.
Analysts with JPMorgan, Evercore ISI, TD Cowen and Bernstein, among others, have named Amazon stock as a top internet pick for 2024.
Why Meta Stock Is Ahead Of Google
Meanwhile, Facebook parent company Meta Platforms is the top pick for Wedbush in digital advertising. The report raised Wedbush's 12-month target price for Meta stock to 420, from 350. That implies just under 20% upside from Meta's closing price Tuesday.
"Meta has driven user engagement across a variety of digital mediums, consistently improving monetization despite temporary industry headwinds related to user privacy and data transparency," Devitt wrote.
Meta has gained nearly 200% this year as sales for its massive digital advertising business bounced back. The stock plunged 64% in 2022 amid a revenue slowdown.
Meta topped Google parent company Alphabet as the top pick for digital advertising. Next year "presents a relatively more challenging year for Google in our view, given the recent deceleration of Google Cloud, uncertainty related to its AI initiatives, and the unknown impact that generative AI will have on Search," Wedbush analysts said.
Still, Wedbush holds a best-possible outperform rating on both Meta and Alphabet stock.
Uber Stock: Racing Ahead
Uber, meanwhile, is the top pick in Wedbush's internet mobility category, ahead of DoorDash, Instacart and Lyft.
Moreover, Uber stock holds an outperform rating from Wedbush. The firm's target price of 67 for Uber that implies 9% upside from Tuesday's closing price.
"We believe Uber has built a highly defensible moat, and (about) 90% of Uber's mobility gross bookings are generated in markets where Uber already has the number one category position," Devitt wrote.
Uber has gained nearly 150% this year. The company this summer reported its first quarter with an operating profit. Further, the firm was added to the S&P 500 earlier this month.
Finally, Booking Holdings is the top pick among online travel stocks. Devitt wrote that BKNG stock has "best-in-class margins" and a proven management team. Wedbush has an outperform rating and 3,850 price target for BKNG stock. That implies 9% upside from Tuesdays' closing price.
On the stock market today, Meta stock gained just under 1% to close at 357.83. Amazon stock traded flat to close at 153.34. Meanwhile, Uber stock gained 2.1% and closed at 63.28 and BKNG lost 1% to close at 3,534.64.
