Mizuho analyst James Lee has reiterated his Buy rating on Amazon.Com Inc (NASDAQ:AMZN) with a price target of $180. He also maintained a Buy rating on Alphabet Inc (NASDAQ:GOOGL) Google with a price target of $150.
According to Mizuho’s ad tracking from leading ad platforms, consumers have remained relatively resilient this quarter, with both Amazon and Google gaining market share.
Lee believes that Amazon’s advertising tracking is exceeding expectations, with e-commerce revenue growth outperforming consensus estimates. Additionally, the October Prime Day has had a strong start, with ad spending growing 30% YoY, indicating positive e-commerce revenue growth.
Lee projects 3Q revenue and EPS for Amazon to be $142.34 billion (prior $141.39 billion) compared to consensus estimates of $134.21 billion and $0.62 compared to consensus estimates of $0.55.
Regarding Google, the ad tracking has been solid. Lee expected advertising revenue to be in line or slightly above consensus estimates. However, he believes that consensus operating expenditure growth for the second half of 2023 appears aggressive without significant cost cuts.
Lee considers Amazon to be his top pick among the mega tech names going into the quarter due to positive e-commerce checks, negative sentiment on AWS, and overstated concerns about competition such as Temu.
For Alphabet, Lee believes that the risk and reward are balanced to mixed going into the quarter. While there have been solid ad checks, positive investor sentiment and optimistic operating expenditure expectations offset some of the potential gains.
Lee projects 3Q revenue and EPS for Alphabet to be $75.51 billion (prior $75.44 billion) compared to consensus estimates of $72.06 billion and $1.43 compared to consensus estimates of $1.37.
As of the last check on Friday, AMZN shares were trading lower by 1.72% at $126.19.
Source: [Benzinga](https://amazonsellerinsider.com/wp-content/uploads/2023/10/amazons-strong-ad-spending-boosts-earnings-outlook-analyst-remains-bullish-on-googles-ad-revenue-growth.png)