META, AMZN Stocks Jump As JPMorgan Picks Pair Over Alphabet — Sees Stronger AI Returns, Cloud Growth

• JPMorgan said AI-driven ad targeting is lifting Meta’s conversions and expects its Family of Apps ad revenue to overtake Google Search from the fourth quarter.
• The firm sees stronger returns from Amazon’s AI infrastructure spending, forecasting AWS growth above 40% in 2027 and 2028.
• It kept Alphabet at ‘Overweight’ but warned AI search monetization could take time, with rising compute costs pressuring cash flow.

Meta Platforms (META) and Amazon (AMZN) shares climbed more than 5% each on Monday as JPMorgan named the companies its preferred internet stocks, citing stronger returns from artificial intelligence (AI) investments across advertising and cloud computing.

According to TheFly, analyst Doug Anmuth added Meta stock to the firm's Analyst Focus List, replacing Alphabet (GOOG, GOOGL), while maintaining an ‘Overweight’ rating on the Google parent.

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JPMorgan said it sees stronger near-term earnings momentum at Meta following third-quarter (Q3) results, with AI improvements translating into higher advertising revenue.

JPMorgan Sees Meta's AI Advertising Momentum Accelerating

Meta's advertising revenue in the fiscal third quarter rose 26% year over year to $63.1 billion, generating approximately $13 billion in additional revenue. North American advertising growth accelerated to 33%.

According to the note cited in an Investing.com report, the firm attributed the gains to AI-driven improvements in ad retrieval, ranking, and targeting, which help advertisers achieve better conversions.

Meta reported a 10% increase in ad impressions and a 14% rise in average price per advertisement during the quarter. JPMorgan said it expects Meta's Family of Apps advertising revenue to surpass Google Search revenue in the fourth quarter and beyond.

The firm also highlighted emerging monetization opportunities from Meta's Muse AI assistant, which has attracted 10 million sign-ups in the U.S. and Canada, alongside enterprise products such as Meta Model API and Muse Code.

Amazon's Cloud Business Strengthens AI Investment Case

JPMorgan also sees stronger returns from AI infrastructure spending, with Amazon Web Services (AWS) delivering accelerating growth. Amazon's third-quarter AWS revenue jumped 39% year-over-year to $46 billion, marking its fastest growth in nearly five years.

AWS operating income climbed to $17.8 billion from $11.4 billion a year earlier, demonstrating improving profitability alongside expanding cloud demand. The bank expects AWS revenue growth to exceed 40% in both 2027 and 2028, according to the report.

Why JPMorgan Dropped Alphabet From Its Focus List

JPMorgan maintained its ‘Overweight’ rating on Alphabet but favored Meta's more immediate advertising gains and Amazon's accelerating cloud growth.

The firm noted that Google Search revenue growth slowed to 12% in the third quarter, compared with 17% in the second quarter and 19% in the first. Still, Google Cloud revenue surged 103% to $30.7 billion, highlighting strong demand for AI infrastructure.

The analyst cautioned that monetizing AI-powered search could take time, while higher computing costs and infrastructure spending may pressure cash flow.

What Retail Thinks About META, AMZN and GOOG Stock

On Stocktwits, retail sentiment around META and GOOG stock was in ‘bullish’ territory, while sentiment around AMZN stock remained in the ‘neutral’ zone.

So far this year, Meta shares have declined about 1%, and Google shares have fallen more than 7%, while Amazon has gained nearly 20%. In comparison, the Roundhill Magnificent Seven ETF (MAGS), which holds all three stocks, has risen more than 7% over the same period.

See Also: Google Expands AI Hardware Push With 2 New TPU Chips — Targets Secure Inference, Doubles Compute

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