Despite global geopolitical tensions and economic uncertainties, financial analysts at major institutions continue to be optimistic about the growth prospects of leading stocks. Currently, they are particularly focused on two prominent companies listed on the Nasdaq index, which are highly favored by analysts from the financial powerhouse JPMorgan. These analysts predict that the bullish trend in the market, which has been evident, may persist into 2024, bolstered by solid fundamentals and strategic innovations in these companies.
The year 2024 has unexpectedly blossomed into a robust bull market, especially notable in the technology sector. This sector has been particularly rewarding for investors and shareholders, rejuvenating after a lackluster previous year. This resurgence has been largely driven by the excitement surrounding developments in artificial intelligence, notably triggered by the launch of OpenAI's ChatGPT and the impressive financial performance of NVIDIA. Additionally, a decrease in inflation rates and the potential for further reductions in key interest rates have significantly supported the momentum of stocks within the technology sector throughout 2023.
Despite the rapid progress and catch-up efforts in the tech industry, "big tech companies" still have considerable opportunities for growth and improvement, according to JPMorgan analyst Doug Anmuth. He specifically highlights Amazon and Alphabet, Google's parent company, as being in prime positions to capitalize on current market trends. Anmuth has chosen these two Nasdaq-listed stocks as his "top picks" for the forthcoming year, suggesting a strong conviction in their potential for substantial gains based on their current strategies and market positions.
The optimism from JPMorgan’s team of analysts regarding the future performance of Alphabet and Amazon in 2024 is underpinned by several key factors. First, the ongoing advancements and integration of artificial intelligence are expected to continue driving the growth of both companies' stock values in the next year. Furthermore, Anmuth anticipates that consumer resilience will remain robust despite a possibly weakening global economy, with consumer sentiment likely to maintain stability. This resilience is anticipated to benefit Amazon's expansive e-commerce operations and Google's substantial advertising revenue, as consumer demand remains strong.
Following the significant market gains seen in 2023, investors are likely to engage in more thorough analyses of sales and profit figures for individual companies in 2024. According to Anmuth, the fundamentals of companies will become increasingly crucial determinants of their stock performance. Although JPMorgan’s overall forecasts for 2024 are cautiously moderate, reflecting various anticipated challenges, a heightened emphasis on fundamental analysis is expected to particularly favor companies like Amazon and Alphabet, which are well-positioned with strong business models and consistent revenue streams.
Both American tech giants, Amazon and Alphabet, are well-placed to benefit from the current economic and market conditions. In the consumer-facing internet sector, for instance, consumer expenditures have been robust across nearly all sub-sectors. This ongoing strength underscores a more positive outlook for these companies compared to last year. In this environment, JPMorgan tends to prefer companies that demonstrate robust growth trajectories, proven profitability, and reasonable valuations, particularly given the current landscape of interest rates, as noted by Yahoo Finance in their analysis of JPMorgan's market perspectives.
In conclusion, Amazon emerges as JPMorgan’s standout investment recommendation for 2024, driven primarily by the expected strong performance of Amazon Web Services (AWS). AWS is anticipated to continue its dynamic growth due to increased adoption of new technological workloads, easier comparisons to the previous year's metrics, and significant investments in generative artificial intelligence technologies. This robust outlook is further reinforced by Amazon CEO Andy Jassy’s confidence in AI technology's potential to generate significant additional revenues in the forthcoming years, a sentiment he expressed at the “re:Invent” conference in December.
15.04.2024
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