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As year-end approaches, analysts are coming out with their top predictions and stock picks for the 2024 market - and it's quite a mixed bag so far. While Goldman Sachs (GS) on Monday upped its 2024 forecast for the S&P 500 Index ($SPX), analysts at Morgan Stanley (MS) are expecting the benchmark equity index to decline through the next calendar year.
However, there's one mega-cap stock that Wall Street analysts seem to agree is a top stock to buy heading into 2024. Here's a closer look at the FAANG stock that's attracting high praise as a standout investment for 2024.
Amazon.com Stock Outperforms
Amazon.com (AMZN) is an online retailer and cloud services provider. They provide products such as apparel, industrial items, electronics, and beauty and health products, among others. The company also manufactures and commercializes its line of electronic devices, including the Kindle, fire TVs, and Alexa. Further, it also provides cloud-based services through its Amazon Web Services (AWS) division, providing easy-to-use, flexible and cost-effective cloud computing solutions.
Amazon shares have surged 79% in 2023, outperforming the S&P 500 as well as the broader Nasdaq Composite ($NASX).
Amazon’s third-quarter results topped Wall Street estimates, led by growth in its cloud and advertising businesses. Revenue rose 13% year-over-year to $143.1 billion, thumping estimates of $141.53 billion. AWS revenue grew 12% to $23.1 billion, slightly narrower than the $23.2 billion estimate - but advertising revenue surged 26% YoY to a stronger-than-forecast $12.06 billion.
Looking ahead, analysts are targeting 35% EPS growth for AMZN in fiscal year 2024, alongside 11% revenue growth.
What Do Analysts Expect for AMZN?
While the stock has already outperformed in 2023, analysts are optimistic about Amazon going into 2024. At least two analysts - TD Cowen's John Blackledge and Bernstein's Mark Shmulik - have named AMZN their top pick for the calendar year ahead.
Blackledge upped his price target on Amazon from $180 to $200 in naming the stock his top large-cap internet pick for 2024, citing high expectations for operating income momentum. The analyst expects this metric to hit $58 billion in 2024, and also argues that Wall Street is underappreciating Amazon's paid advertising tier on Prime Video. Blackledge has an “outperform” rating on AMZN.
As for Shmulik, the analyst seems to concur that operating income at Amazon “is poised for an unprecedented run,” and calls the stock his top idea, with a $175 price target and a rating of “outperform.”
Overall, analysts are bullish on Amazon’s stock, with a consensus “Strong Buy” rating and a mean price target of $174.40 - signifying expected upside of more than 13% from current levels. Out of the 40 analysts currently covering the stock, 36 have a “Strong Buy” rating, 3 have a “Moderate Buy” rating, and 1 has a “Hold” rating.
