Seana Smith

This year was all about the megacap stocks — led by the “Magnificent Seven” — which dominated market action as hype surrounding artificial intelligence and concerns over rising rates prompted investors to flock to proven tech companies.

Looking ahead to the new year, JPMorgan is making the case that there’s still money to be made in these high flyers, naming some of this year’s big winners as the best buys for 2024.

Amazon (AMZN) and Google (GOOGL) will outperform again, according to JPMorgan analyst Doug Anmuth. He and his team expect both companies to benefit from a resilient consumer and recent bets on generative AI, as company-specific fundamentals become a “bigger factor” next year.

In a note to clients, Anmuth wrote, “For the consumer-driven Internet sector, consumer spending has proven resilient across virtually all sub-sectors and we believe corporates have a more constructive outlook than a year ago.”

“We generally prefer companies with solid growth, proven profitability profiles, and reasonable valuation given the current interest rate environment,” Anmuth added.

Anmuth and his team see Amazon — dubbed their “best idea” — rallying 28% from Tuesday’s close, thanks in part to accelerating revenue growth in its cloud computing unit, Amazon Web Services (AWS). JPMorgan expects new workload deployment, easier year-over-year comparisons, and growing contribution from generative AI investments to fuel AWS’s momentum.

Amazon’s share price is up 73% year to date, far outpacing the S&P 500’s 23% gain.

At Amazon’s re:Invent conference earlier this month, Yahoo Finance’s Allie Garfinkle spoke to a number of executives about the company’s push into generative AI, an initiative that CEO Andy Jassy has said represents “tens of billions” in potential revenue over the coming years.

For Google, improving ad growth, increasing margins after cost cuts, and a new AI push are among reasons to be bullish on the stock.

“While still early, we believe Gemini Ultra represents significant innovation and should start to close the Gen AI gap as it rolls out in early 2024,” Anmuth wrote. Earlier this month Google unveiled Gemini, its much-hyped generative AI model and competitor to OpenAI’s GPT-4.

“We believe Google has weaker sentiment and is less owned than other mega-caps,” Anmuth added. He downplayed risks stemming from Google’s antitrust trials, arguing the impact could be “less onerous than feared.”

The search giant’s stock is up nearly 50% on the year.

Another top pick is Uber (UBER), as demand for mobility and food delivery continues to rise, particularly in newer verticals like groceries. Other internet themes Anmuth’s team identified include more balanced growth in streaming as it shifts to ad-supported models, continuing trend towards e-commerce, and online travel returning to normalized growth after a booming recovery.

Other stocks among the team’s top internet plays for 2024 are dating apps group Match (MTCH), smart TV maker VIZIO (VZIO), and online insurance marketplace EverQuote (EVER).

Seana Smith is an anchor at Yahoo Finance. Follow Smith on Twitter @SeanaNSmith. Tips on deals, mergers, activist situations, or anything else? Email

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