Amazon, Meta, and Google: Analysts Reveal Unseen Insights for 2024

Wedbush analysts led by Scott Devitt painted their internet outlook for 2024.

Looking ahead to 2024, the analysts noted that leading consumer internet platforms remain well positioned with rising margins and improving industry growth rates across eCommerce and digital advertising. 

For 2024, their top ideas by vertical are Amazon.Com Inc AMZN (eCommerce) and Meta Platforms Inc META (Digital Advertising).

The analysts expect more normalized growth rates for eCommerce and digital advertising in 2024, with both industries positioned to accelerate next year. 

eCommerce penetration of total retail should rise 99bps in the U.S. in 2024, while digital advertising's share of U.S. media spend will increase 230bps to ~77%.

Retail media remains one of the fastest-growing segments of digital advertising, with growth of ~22% in 2024 for the analysts.

Within Wedbush's coverage rankings, the analysts lowered Alphabet Inc GOOGL Google to #2 within Digital Advertising and raised Meta to #1. 

According to the analysts, 2024 presents a relatively more challenging year for Google, given the recent deceleration of Google Cloud, uncertainty related to its AI initiatives, and the unknown impact that generative AI will have on Search.

Amazon is the Wedbush analysts' top pick across their internet coverage, and they noted that the company is well positioned for 2024 as retail margins continue to rise, AWS accelerates against easing comps, and advertising revenue growth continues to outperform the broader digital advertising industry materially. 

Wedbush maintained an Outperform rating with a price target of $210 on Amazon. The analysts project FY24 revenue of $641.59 billion versus a consensus of $637.14 billion.

Wedbush analysts expect Meta to benefit from improving monetization of new products (Reels, click-to message), with Reels providing a modest tailwind to revenue in 2024 after becoming revenue neutral and as short-form video spending increases.

New generative AI features like Meta AI (chatbot assistant), and AI avatars on Facebook and Instagram can potentially increase engagement in 2024 and beyond, as per the analysts. 

Wedbush reiterated an Outperform rating on Meta and raised the price target from $350 to $420. The analysts project FY24 revenue of $150.42 billion versus the consensus of $151.09 billion.

Wedbush analysts view Google as a long-term winner within the

digital advertising industry with broad exposure and a durable market share of overall media spending. 

The company is positioned for modest margin expansion in 2024 as growth accelerates against an improving industry backdrop. 

There is significant optionality for Google across Cloud & AI, as the company experiments with SGE, Gemini, and embedding AI into various consumer and enterprise products. 

Wedbush maintained an Outperform rating with a price target of $160. The analysts project FY24 revenue of $340.07 billion versus a consensus of $341.34 billion.

Price Actions: AMZN shares traded higher by 0.15% at $153.35 on the last check Wednesday.