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JPMorgan names Amazon 'best idea' in 2024

As the first quarter earnings season progresses, analysts at JPMorgan (JPM) have taken a bullish stance on the internet sector. The investment bank is particularly positive about names like Netflix (NFLX), Meta (META), and Uber (UBER). However, JPMorgan's top pick among the group is Amazon (AMZN), which the firm calls its "best idea" for 2024.

Yahoo Finance's Seana Smith and Brad Smith break down the details.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Angel Smith

Video transcript

BRAD SMITH: JP Morgan predicting strong results in the broader internet sector with Amazon, Meta, Uber and soon to report Netflix, remaining top overall picks among big cap tech. Netflix will report its first quarter earnings results this Thursday here, and one of the huge things to watch of course with Netflix is how especially with the additive of their advertising tier.

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They're continuing to see that average revenue per user grow out or versus the users that say, hey, I don't want any ads. I just want to say the same content or some new content that the company is investing in. And that content investment is also going to be key at this juncture where there's so much rumination about what the next big sports play and the big rights acquisition that Netflix is going to need to make. Looks like they've already done that strategically as well here with TKO and UFC and WWE there.

SEANA SMITH: Yeah, and JP Morgan remaining constructive on Netflix, really specifically given the fact that it is by far the leader within this space. We know there has been a lot of pressure when you take a look at a number of the other streaming names. So JP Morgan, very constructive on Netflix, but what also stuck out to me in this report was the bullish take on Amazon. JP Morgan actually naming Amazon its top pick calling it its best idea for 2024. They talked about the strong fundamentals the growth prospects when it comes to Amazon's anticipated performance here over the coming quarters.

Now the analysts there are saying that they expect to see accelerated growth in AWS, Amazon Web Services, throughout the year. And they see that fueled by optimizations the new workload deployment. They're helping numbers within that division, AWS, a real critical key component. And then following Amazon as a top idea, he's also constructive and positive on Meta and Uber. So it looks like at least from this note, the initial take. JP Morgan is pretty bullish on the internet sector here ahead of those earnings results, like you said, that are just going to get started in a couple of days.

BRAD SMITH: Yeah, they did make some other interesting acknowledgments here as well. Snap which is, of course, a big topic of conversation on our morning meetings, they say snap shares have underperformed the broader market, obviously. They believe investors are frustrated by choppy results lack of visibility into ad stack progress overall. They believe investor expectations for the first quarter revenue are toward the lower end of the guide here and debate on whether the second quarter actually show further acceleration there. So you've got some winners, and you've got some losers within this digital ad marketplace right now. And those are some of the calls that JP Morgan put out there this morning.