The term “As the first quarter earnings season progresses, Analysts at JPMorganJPM() has taken a positive stance towards the Internet sector. Investment bank is especially positive on names such as Netflix.NFLXMetaMETAUber, for example (UBER). Amazon is JPMorgan’s number one pick.AMZNThe firm’s “best idea” is for the year 2024.
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Video transcript
BRAD SMITH : JP Morgan predicts strong results for the internet sector, with Amazon, Meta and Uber, as well as Netflix (which will soon report) remaining among the top picks of big cap technology. Netflix’s first-quarter earnings will be reported here on Thursday. One of the most important things to look out for is the addition of Netflix’s advertising tier.
The average revenue per customer is continuing to grow, even if the user says, “hey, no ads for me.” The company invests in the same or new content. This content investment will also be crucial at this point, when there is so much speculation about the next major sports event and what rights Netflix needs to acquire. It looks like they have already made that strategic decision with TKO, UFC and WWE.
SEANA SMITH JP Morgan is also being constructive about Netflix. This is especially important given that Netflix has been the market leader for a long time. When you look at the streaming companies, we know that there was a great deal of pressure. JP Morgan was very positive about Netflix. But what I found most interesting in the report is how bullish they were on Amazon. JP Morgan named Amazon as its number one pick, calling it their best idea for the year 2024. Amazon was praised for its strong fundamentals and growth prospects.
Analysts there say that they are expecting to see an accelerated growth of AWS (Amazon Web Services) throughout the entire year. They see this fueled by the optimization of new workloads. AWS is a critical component for the division. They are helping to increase numbers. He’s constructive on Meta, and Uber is also a positive idea. It seems that at least based on this note, it is the first take. JP Morgan seems to be pretty optimistic about the Internet sector, ahead of earnings, which, as you mentioned, are only going to start in two days.
BRAD SMITH They did acknowledge some interesting things here. They say that snap, which of course is a hot topic in our morning meetings says the shares of Snap have clearly underperformed. Investors are frustrated with choppy results and lack of transparency in ad stack overall. Investor expectations are at the low end. There is debate about whether or not the second quarter will show a further acceleration. You’ve also got winners and losers in this current digital advertising market. JP Morgan made some calls this morning.