After tech stocks’ blowout year, one team of analysts foresees momentum persisting for a handful of players into 2018. JPMorgan analyst Doug Anmuth and team released their internet outlook for the new year on Monday, writing that their best ideas for large caps are Amazon.com Inc. (AMZN), Facebook Inc. (FB) and Priceline Inc. (PCLN). For mid caps, the investment firm recommends Twitter Inc. (TWTR) and Yelp Inc. (YELP). (See also: GOP Tax Plan Could Save Tech's Big 3 $4.5B: Cowen.)

Highlighting Seattle-based Amazon’s expanding market share and the success of its public cloud computing platform Amazon Web Services (AWS), JPMorgan indicated that the e-commerce giant is just in its beginning stages of growth.

“We believe Amazon is well positioned as the market leader in e-commerce, where it's still early days with U.S. e-commerce representing about 12 percent of adjusted retail sales (ex-gas, food, and autos), which we view as likely going to 30 percent over time,” wrote Anmuth. His 12-month price target of $1,375 implies a near 16% upside from Tuesday's close. AMZN has far outperformed the market this year, up 58.34% versus the S&P 500’s 19.8% gain over the same period.

JPMorgan Bullish on Large-Cap, Mid-Cap Tech Stocks

Anmuth upgraded shares of social media platform Twitter and lifted his price target from $20 to $27. As TWTR stock gains 53.9% year-to-date (YTD), the analyst expects daily active user growth and scaling ad revenue to continue to drive returns. Social media giant Facebook should also continue to outperform, wrote Anmuth, whose price target of $225 indicates an over 25% upside over the next year.

The investment bank is more bullish on online travel agent Priceline, lifting its price target from $1,950 to $2,050 and reflecting a 15% upside over 12 months.

“We continue to think Priceline is the best in class in online travel with strong growth driven by scale benefits, efficient performance & brand spend, and large and growing supply,” wrote the JPMorgan analyst. (See also: Tech’s Weakness Is Temporary: Bespoke Co-Founder.)

 

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