The tech giants’ third-quarter earnings season was a mixed bag. While some managed to impress investors with their performance and prospects, others continued to fall short of expectations in some areas. Wall Street remains bullish on several tech giants, thanks to generative AI (artificial intelligence)-led tailwinds. Using TipRanks’ stock comparison tool, we pitted Meta Platforms (META), Uber Technologies (UBER), and Amazon (AMZN) against each other to find the ‘Strong Buy’ stocks with the highest upside potential, according to Wall Street analysts.
Social media giant Meta Platforms reported better-than-expected revenue and profit in the third quarter of 2024. The company’s revenue grew 19% year-over-year to $40.5 billion, while earnings per share (earnings per share) grew 37% rose to $6.03. .
However, shares fell after the earnings report as investors were disappointed with Meta’s lackluster user numbers. Daily active people (DAP), which represents the number of users who visited at least one of the family apps (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, rose 5% to 3.29 billion, but lagged the analyst consensus of 3.31 billion.
Additionally, the company increased its 2024 investment guidance, with CEO Mark Zuckerberg warning investors of a significant increase in AI infrastructure investment in 2025.
Following the Q3 release, Baird analyst Colin Sebastian reaffirmed a buy rating on META stock and raised the price target from $605 to $630. The analyst believes the company’s strong third-quarter results reflect a stable macro backdrop, healthy user growth and engagement trends, and the benefits of AI in advertising products and content recommendations. He expects AI to drive further growth of Meta Platforms in the coming days.
Like Sebastian, most analysts are optimistic about Meta Platform’s prospects. META stock scores a Strong Buy consensus rating based on 41 Buys, three Holds, and one Sell recommendation. The average META stock price target of $654.23 implies 11% upside potential. Shares are up 66.5% this year.
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Shares of Uber Technologies fell 9.3% on October 31 as the company reported slower-than-expected booking growth and sparked investor concerns about the impact of macroeconomic pressures on demand in the taxi sector. The company’s gross bookings grew 16% year-over-year to $40.97 billion, below analyst estimates of $41.25 billion.
On the plus side, Uber’s third-quarter revenue rose 20% to $9.29 billion, beating expectations. The company’s earnings per share (EPS) rose to $1.20 from $0.10 in the prior year quarter, reflecting the recognition of a $1.7 billion benefit from unrealized gains related to the revaluation of its equity investments.
Looking ahead, Uber CEO Dara Khosrowshahi is confident in the company’s future and stated that the strength of its core business is supporting organic investments in new products and capabilities to drive long-term growth.
In response to the results, Goldman Sachs analyst Eric Sheridan reaffirmed a buy rating on Uber Technologies shares with a price target of $96. The analyst believes that after the post-earnings pullback, UBER is the best “absolute upside return idea” among Goldman’s large-cap coverage.
Sheridan explained that UBER’s stock story focuses on its growing end markets, rising profitability and increasing evidence of the cross-sell opportunities on the platform, which should help investors understand the company’s growth, margins and free cash flow potential to reconsider.
With 32 Buys and two Holds, Wall Street has a Strong Buy consensus rating on Uber Technologies stock. The average UBER stock price target of $91.86 implies 27.5% upside potential from current levels. Shares are up 17% so far this year.
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Shares of e-commerce and cloud computing giant Amazon are up 37% this year. The company recently impressed investors with its upbeat third-quarter results. AMZN’s third-quarter revenue grew 11% to $158.9 billion, driven by strength in its retail, AWS (Amazon Web Services) cloud and advertising businesses.
Additionally, third-quarter earnings per share rose more than 50% to $1.43, thanks to solid revenue growth and improved margins. Amazon’s aggressive streamlining and cost reduction measures are driving higher margins.
Like other tech giants, Amazon is also making significant investments to capitalize on AI opportunities. The company has made capital investments of $51.9 billion so far in 2024 and expects to spend approximately $75 billion on capital expenditures throughout the year.
On November 1, Citi analyst Ronald Josey raised the price target for Amazon stock from $245 to $252 and reaffirmed a buy rating. Josey stated that following the third quarter results, he is increasingly confident in the company’s ability to make growth investments while delivering significant margin expansion.
Commenting on AWS, he noted that the unit’s AI business is a multi-billion dollar run-rate business that continues to grow at triple-digit annual rates. He expects generative AI revenues to drive AWS’s business as new instances and demand increase. For Citi, Amazon remains a top choice in the internet sector.
Overall, Amazon scores a Strong Buy consensus rating on TipRanks based on 44 Buys and one Hold recommendation. At $238.35, the average AMZN stock price target implies 14.5% upside potential.
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Wall Street is very optimistic about the growth prospects of Meta Platforms, Uber Technologies and Amazon. Analysts see the pullback in UBER as a good opportunity to buy the stock and benefit from its long-term growth story. They see higher upside potential in Uber stock compared to the other two tech stocks.
