Artificial Intelligence Transformation in the Digital Landscape with Amazon and Meta Leading the Way

In the dynamic tech landscape, artificial intelligence (AI) emerges as the next milestone in digital platforms, presenting itself as an alternative or even a substitute for traditional internet. According to analysts at Raymond James, Amazon.com and Meta Platforms lead this revolution, outpacing Google’s parent company, Alphabet.

Amazon, Meta ‘Strong Buy’; Alphabet Faces AI Concerns

Josh Beck, an analyst at Raymond James, has given Amazon and Meta “Strong Buy” ratings in their latest research. While expressing optimism, the “Outperform” rating for Alphabet reflects concerns about the potential impact of generative AI on its core search business.

Beck’s Futuristic Vision

Beck envisions AI evolving into an integrated operating system across diverse digital platforms for consumers and businesses. This evolution will contribute to tasks ranging from office productivity to vacation planning. Generative AI software revenue may reach $100 billion in a few years, potentially hitting $300 billion in five years.

Amazon: Undisputed Leader

In this scenario, Amazon stands out as a leader, thanks to its influential cloud computing business, Amazon Web Services, and its wide range of services offering generative AI tools and hardware to businesses. Beck anticipates that, although significant contributions from generative AI to Amazon are not expected in 2024, it could contribute a total of $10 billion in annual recurring revenue in the coming years.

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Meta’s Strength in Artificial Intelligence Integration for Enhanced User Engagement

Regarding Meta, Beck sees it as a promising player, with strength in internal AI tool integration rather than external offerings. AI-driven content recommendations on Facebook, Instagram, and WhatsApp are poised to enhance user engagement, fueling consistent growth in advertising budgets.

Outlook for Alphabet

Beck doesn’t consider Alphabet a loser but challenges the company to demonstrate how AI will impact search economies. Beck suggests that Google’s costs to respond to queries may increase. The company must demonstrate having a world-class AI model to maintain or expand its dominant market share in search.

Amazon, Meta, Alphabet: Artificial Intelligence Stocks Soar

Coverage of Amazon’s stocks begins with a “Strong Buy” rating and a price target of $185. Similarly, for Meta, the rating is “Strong Buy” with a price target of $425. In the case of Alphabet, the rating is “Outperform” with a price target of $150. Alphabet’s shares rose 2.4% to $139.86 on Wednesday, marking the beginning of this exciting chapter at the intersection of artificial intelligence and the digital future.

In the dynamic tech landscape, AI emerges as a game-changer, with Amazon and Meta leading over Alphabet. Analyst Josh Beck’s “Strong Buy” for Amazon and Meta reflects optimism in their AI capabilities, while he challenges Alphabet to navigate AI’s impact on search economies. The trio’s stocks soar, marking an exciting chapter in the AI-digital era, said WSJ Subscription Deals.