Scott Devitt, a Top-rated analyst from Wedbush, believes that rising U.S. ad spending presents a significant opportunity for Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), and Amazon (NASDAQ:AMZN). The optimistic outlook stems from a recent Wedbush study of 200 U.S.-based marketers from advertising agencies and in-house advertisers, which presented a robust outlook for the digital advertising industry in 2024.
According to the survey, 48% of marketers increased their digital advertising spend by more than 10% year-over-year in Q1. Furthermore, the results indicate strong growth throughout 2024. The analyst revealed that 61% of marketers plan to increase their spending by at least 10% this year, with 11% targeting an increase of 20% or higher.
Now let’s see how Devitt expects this rising trend to benefit these stocks.
What Is the Future of Alphabet Stock?
Devitt noted that Alphabet’s Google search and YouTube platforms have received healthy feedback from advertisers. The survey indicates that Google search is estimated to grow by 10% year-over-year this year. Additionally, 84% of advertisers plan to increase their spending. These rising trends are expected to boost the company’s revenues in 2024.
Moreover, the company’s investments in AI (artificial intelligence) and rising ad spending keep Wall Street bullish on Alphabet. With 29 Buy and eight Hold recommendations, GOOGL stock has a Strong Buy consensus rating. Despite the 44% yearly gain in its stock price, analysts’ average price target of $165.28 implies an upside potential of 9.8% from current levels.
What is Meta Stock’s Future?
The research firm is optimistic about Meta stock as the survey indicates strong spending intentions for the current quarter and the full year 2024, surpassing the Q1 growth rates. Furthermore, 52% of advertisers plan to increase social media spending by more than 10% in 2024, compared with 42% in the previous survey.
Analysts are optimistic about Meta stock owing to the company’s dominant position among social networking platform providers. It has received 40 Buys, two Holds, and one Sell for a Strong Buy consensus rating. Further, analysts’ average price target of $530.58 implies 3.85% upside potential. The stock is up 45.3% over the past three months.
Is Amazon a Buy, Sell, or Hold?
According to the survey, AMZN is the preferred choice among advertisers. Remarkably, 95% of advertisers are planning to raise their Amazon ad budgets in 2024, with 22% planning a more than 20% increase.
The company’s diverse offerings, including an online retail platform, cloud computing services, digital streaming, and AI-related products, keep analysts bullish on Amazon stock. It has received 41 unanimous Buy recommendations, translating into a Strong Buy consensus rating. The analysts’ average price target of $209.74 implies 16.5% upside potential. AMZN stock has gained 24% over the past three months.
Concluding Thoughts
Alphabet, Meta, and Amazon are all well-poised to benefit from the rise in digital advertising spending. Their strong presence on social media platforms is likely to attract advertisers looking to reach a large and active user base.
