The Q3 earnings season for the tech giants has been a mixed bag. While some managed to impress investors with their performance and outlook, others fell short of expectations on some metrics. Wall Street remains upbeat on several tech giants, thanks to generative AI (artificial intelligence)-led tailwinds. Using TipRanks’ Stock Comparison Tool, we placed Meta Platforms (META), Uber Technologies (UBER), and Amazon (AMZN) against each other to find the “Strong Buy” stock with the highest upside potential, according to Wall Street analysts.
Social media giant Meta Platforms reported better-than-expected Q3 revenue and earnings for the third quarter of 2024. The company’s top line grew 19% year-over-year to $40.5 billion, while EPS (earnings per share) rose 37% to $6.03.
However, shares fell after the earnings report as investors were disappointed with Meta’s subdued user numbers. Daily active people (DAP), which indicates the number of users who visited at least one of the family apps (Facebook, Instagram, Messenger, and/or WhatsApp) on a given day, increased 5% to 3.29 billion but lagged analysts’ consensus of 3.31 billion.
Moreover, the company increased its capital expenditure guidance for 2024, with CEO Mark Zuckerberg cautioning investors about a significant rise in AI infrastructure capex in 2025.
Following the Q3 print, Baird analyst Colin Sebastian reaffirmed a Buy rating on META stock and increased the price target to $630 from $605. The analyst believes that the company’s strong Q3 results reflect a stable macro backdrop, healthy user growth and engagement trends, and the benefits of AI in ad products and content recommendations. He expects AI to drive further growth for Meta Platforms in the days ahead.
Like Sebastian, most analysts are bullish on 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 have rallied 66.5% year-to-date.
Uber Technologies stock fell 9.3% on October 31, as the company reported slower-than-expected bookings growth and triggered concerns among investors about the impact of macro pressures on the demand in the ride-hailing industry. The company’s gross bookings grew 16% year-over-year to $40.97 billion, falling short of analysts’ estimate of $41.25 billion.
On the positive side, Uber’s Q3 revenue increased 20% to $9.29 billion and surpassed estimates. The company’s earnings per share (EPS) jumped to $1.20 from $0.10 in the prior-year quarter, reflecting the inclusion of a $1.7 billion benefit from unrealized gains related to the reevaluation of its equity investments.
Looking ahead, Uber CEO Dara Khosrowshahi is confident about the company’s future and stated that the strength in its core business is supporting its organic investments in new products and capabilities to drive long term growth.
In reaction to the results, Goldman Sachs analyst Eric Sheridan reaffirmed a Buy rating on Uber Technologies stock with a price target of $96. The analyst thinks that following the post-earnings pullback, UBER is the best “absolute upside return idea” among Goldman’s large-cap coverage.
Sheridan explained that UBER’s equity story is focused on its expanding end markets, rising profitability levels, and increased evidence of the cross-sell opportunities on the platform, which should help investors reconsider the company’s growth, margins, and free cash flow potential.
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 have risen 17% so far this year.
Shares of e-commerce and cloud computing giant Amazon have jumped 37% year-to-date. The company recently impressed investors with its upbeat Q3 results. AMZN’s Q3 sales grew 11% to $158.9 billion, driven by strength in its retail, AWS (Amazon Web Services) cloud, and ad businesses.
Additionally, Q3 EPS surged over 50% to $1.43, driven by solid top-line growth and enhanced margins. Amazon’s aggressive streamlining and cost reduction measures are driving higher margins.
Like other tech giants, Amazon is also making significant investments to capture opportunities in AI. The company has made capital investments worth $51.9 billion so far in 2024 and expects to spend about $75 billion in capex in the full year.
On November 1, Citi analyst Ronald Josey increased the price target for Amazon stock to $252 from $245 and reaffirmed a Buy rating. Josey stated that following the Q3 results, he is incrementally confident about 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 multibillion-dollar revenue run rate business that continues to grow at a triple-digit year-over-year rate. He expects generative AI revenue to boost AWS’ business, as new instances and demand ramp. For Citi, Amazon remains a top pick across 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.
Wall Street is highly bullish on 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 gain from its long-term growth story. They see higher upside potential in Uber stock compared to the other two tech stocks.
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