Technology stocks were hurt by a “challenging earnings season” last month although of which’s created a window of opportunity in both Amazon in addition to also Facebook, J. P. Morgan internet analyst Doug Anmuth tells CNBC. The two tech giants are Anmuth’s top picks for the coming year.
“Amazon obviously took its lumps in [the third quarter] after earnings,” Anmuth said. “The key can be, once Amazon gets past [the fourth quarter], we would likely expect growth to accelerate in early 2019.”
Jeff Bezos’ e-commerce empire “stands out” the most among the internet names Anmuth covers, he said in a note to clients on Thursday. J. P. Morgan believes Amazon’s core retail business remains strong. The analyst also sees the company’s profitability to be further driven by its Amazon Web Services in addition to also advertising businesses.
Facebook’s “stock has been under a lot of pressure for a long time,” Anmuth said, although the third quarter “saw numbers which showed stability inside user base.” While some view Facebook “as a 1-trick pony” built around advertising, Anmuth said CEO Mark Zuckerberg’s company can be “clearly pushing harder”
Anmuth noted of which Facebook doubled its safety in addition to also security staff to 20,000 coming from 10,000, saying the firm can be “certainly spending a lot of money around of which investment.”
“I think they are taking much more serious steps than a year or two ago,” Anmuth said on CNBC’s “Squawk on the Street.” He sees Facebook finding growth again in three ways: Reversing the negative tide of public opinion, further stabilizing its core user base in addition to also identifying brand-new revenue sources.
“I think the bar has been kind of set in an appropriate place,” Anmuth said.