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Big Tech stock targets raised at TD Cowen ahead of Q2 earnings

Published 07/10/2024, 09:34 AM
Updated 07/10/2024, 09:36 AM
© Reuters Big Tech stock targets raised at TD Cowen ahead of Q2 earnings

TD Cowen lifted their stock price targets for Big Tech companies as Wall Street braces for the start of the Q2 earnings season.

The bank’s analysts have set a new price target of $245 for Amazon (NASDAQ:AMZN), up from the previous $225, reflecting their expectation of a strong Q2 performance.

The analysts forecast Q2 revenue of $150.2 billion, an 11.8% year-over-year increase, driven by a 16.6% growth in AWS revenue and a 22.0% surge in advertising revenue.

“Our 2Q24 Op Income forecast of $15.2BN, +98% y/y, is 20% above consensus given ramping gross profits, opex efficiencies and a benefit from extended server lives,” analysts said in a note.

For Alphabet (NASDAQ:GOOGL), analysts have increased their price target from $130 to $145, based on strong growth across its segments.

The analysts expect Q2 revenue of $85.5 billion, a 13.3% year-over-year increase. This growth is primarily driven by a 12.5% rise in Google Services revenue, bolstered by continued strength in search and YouTube, and a 27.2% increase in Google Cloud revenue.

“Our 2Q Digital ad expert check call on 7/8 suggests GOOG Search spend growth remained robust in 2Q24, implying a healthy Digital ad environment. Meanwhile, our survey data suggests YouTube is still gaining share among younger viewers,” the note states.

Lastly, TD Cowen's new price target for Meta Platforms (NASDAQ:META) is $600, up from the previous target of $530.

The upward revision reflects analysts’ optimism about the company's long-term growth driven by AI initiatives.

They expect Meta's Q2 revenue to reach $38.6 billion, a 20.6% year-over-year increase and 1% above consensus estimates.

TD Cowen highlighted that the company’s AI focus is fueling growth across the board, primarily engagement growth “supported by Reels/Video and AI recommendations.” Moreover, monetization is boosted by AI-led ad ranking and campaigns, particularly through the Advantage Plus campaign suite, while the rollout of new AI messaging tools in Q2 2024 is likely to attract more advertisers to Meta's platforms.

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