This article first appeared on GuruFocus.
Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG) both got a boost Tuesday after BNP Paribas Exane’s Nick Jones came out with fresh Outperform ratings on the two tech heavyweights. Jones, who ranks near the top of more than 10,000 analysts on TipRanks, basically said the long-term story for both companies is still very much intact and that cloud, advertising and AI remain the biggest reasons to stay bullish.
For Amazon, he said AWS is still the company’s crown jewel and continues to throw off the kind of profits other cloud players envy. Jones also pointed out that Amazon’s ad business has a lot more room to grow as brands pour money into retail search and streaming. And on AI, he thinks the market is worrying way too much saying Amazon is already weaving AI into AWS and its core products. His price target: $320, or roughly 41% upside.
As for Alphabet, Jones said Search is still dominant, YouTube demand keeps climbing and Google Cloud is gaining meaningful traction. He thinks earlier concerns about AI competition were overdone and that Alphabet’s recent progress is starting to show up in investor sentiment. His target: $355, about 12% higher from here. Now the focus shifts to Q4 to see if the momentum continues.
