# JPMorgan Amazon and Alphabet Top Picks for 2024 $AMZN $GOOGL

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Last modified: 2023-12-14

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By Shayne Heffernan · 2023-12-14
Tags: Shayne Heffernan on Investments, Stocks, Headline News, Shayne Heffernan, US Stocks, Opinion, Shayne Heffernan, Nasdaq, Knightsbridge Insights, Must Read, Most Popular, Featured, 2024
Signed: no (published before platform launch).
Nothing in this article is investment advice.

Wall Street heavyweight JPMorgan is making a bold call on internet stocks for 2024, dubbing **Amazon and Alphabet** its "top picks" and predicting double-digit upside for both tech giants. This bullish outlook hinges on a belief that mega-cap tech's reign will continue next year, fueled by reaccelerating revenue growth and strategic margin management.

**Why Amazon is Soaring:**

- **E-commerce Engine Revving Up:** JPMorgan expects Amazon's total revenue to surge 13% in 2024, propelled by a **17% jump in Amazon Web Services (AWS)** and an **11% increase in retail** growth.
- **Cloud Computing Champion:** AWS, already a cloud market leader, will benefit from strong secular trends, new workload deployments, and growing contributions from its cutting-edge Gen AI advancements.
- **Retail Rebound:** With increased same-day delivery, expanded third-party fulfillment, and pricing power, Amazon's core retail segment is poised for an 11% growth spurt.
- **Profitability on the Rise:** Operating income margin is projected to expand by 200 basis points, thanks to margin improvements in North America, International business, and a slight inflection in AWS margins.

**Alphabet's AI Advantage:**

- **Ad Revenue Ascending:** Gross revenue is expected to climb 11% in 2024, driven by Google Cloud and YouTube ads. AI-powered ad tools, secular shifts in online advertising, YouTube Shorts monetization, and favorable comparisons are key drivers.
- **Margin Magic:** JPMorgan forecasts a 175-basis-point expansion in profit margin as Alphabet optimizes its cost structure.
- **Gen AI Leapfrog:** The innovative Gemini Ultra platform positions Alphabet to bridge the gap with Generative AI leaders, further solidifying its AI-forward image.
- **Undervalued and Unloved:** Weaker sentiment and lower institutional ownership, coupled with an "undemanding" valuation, make Alphabet a lucrative opportunity for investors in 2024.

**Looking Ahead:**

JPMorgan acknowledges potential hurdles like antitrust lawsuits against Google and a potential slowdown in the broader tech sector. However, the bank's unwavering belief in the power of Amazon's e-commerce engine and Alphabet's AI prowess leads them to predict outsized gains for both companies in 2024.

This bold call from a major financial institution is sure to send ripples through the tech landscape. Investors looking for high-growth, high-margin plays in the internet space will keep a close eye on Amazon and Alphabet as they aim to scale new heights in the coming year.

Shayne Heffernan

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