Baird analyst Colin Sebastian, in selecting Amazon and Meta, transitioned away from Google owner Alphabet (GOOGL), which was his top pick in 2021. Alphabet stock has gained 69% this year.
“As the page turns to 2022, investors remain focused on shorter-term trends, near-term comps, and macro influences, more than on longer-term secular growth drivers,” Sebastian wrote in a note to clients. “While we generally prefer companies with large total addressable markets and strong engineering capabilities, we are also factoring in near-term growth comps and margin trends.”
Regarding Meta, he said industry checks suggest improved performance and measurement for Facebook and Instagram advertising.
Bright Prospects For Meta Stock
“We think there is further room for shares to outperform in 2022,” with increasing confidence in Meta’s overall platform and market share in online advertising, he said.
Sebastian has a price target on Meta stock of 390. Meta stock closed at 342.94, down 1%, on the stock market today.
Regarding Amazon, “We think that concerns over slower online retail growth and lower margins have largely run their course,” Sebastian said. “We believe sentiment will improve over the course of 2022.”
In addition, he said, “With enterprises rapidly shifting technology spend from on-premise overhead to cloud services, we think stronger AWS (Amazon Web Services) performance represents another likely catalyst during the year.”
He set a price target on Amazon stock of 4,000. Amazon stock closed at 3,384.02, down 0.9%. Alphabet stock closed flat at 2,933.10.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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