Goldman Sachs is naming a list of stock picks – including some notable tech behemoths – that could strike the perfect balance of risk and reward as the year winds down. “These companies share a few key narratives including a well-established & scaled end market positioning, ability to manage for improved margin trajectory in 2023/2024 (irrespective of the macro backdrop), & ability to navigate residual investor debates about a mixture of growth and earnings power that are increasingly focused on 2024 and beyond,” Goldman Sachs managing director Eric Sheridan wrote in a Thursday note. Tech stocks have been a source of strength on Wall Street in 2023, with the Nasdaq Composite up 34% in that period. Here’s a look at the stocks that made Goldman’s cut. E-commerce giant Amazon has added 70% in 2023. Sheridan highlighted the company’s potential for further margin growth as well as an “underappreciated secular growth opportunity” for its cloud business Amazon Web Services (AWS). “Looking over a multi-year timeframe, we reiterate our view that Amazon will compound a mix of solid revenue trajectory with expanding margins as they deliver yield/returns on multiple year investment cycles,” Sheridan said. The stock is rated buy, and Goldman has a 12-month price target of $190. That suggests upside of about 33% from Wednesday’s close. Ride-sharing giant Uber also made the Goldman list. Shares have surged 120% from the start of 2023. The company will continue to benefit from a strong supply and demand dynamic and a stabilization of the Uber Eats segment, Sheridan said. “Looking long term, we are bullish on UBER as a rising two-sided platform that uniquely captures a mixture of consumer ( & increasingly enterprise) demand while remaining the largest scaled player globally offering a widening array of products across Mobility and Delivery on a single platform,” Sheridan said. The firm rates Uber as a buy. Goldman’s 12-month price target of $59 implies upside of nearly 10% from Wednesday’s close. UBER YTD line Uber shares in 2023 Finally, Google-parent company Alphabet stock has climbed roughly 54% from the start of the year. Sheridan’s bullish take on the company is largely tied to Alphabet’s potential to expand revenue growth in the fourth quarter into 2024, and further monetize both its search and YouTube segments. The analyst also pointed to Alphabet’s exposure to artificial intelligence, which has been a key focus for the company with its large language model Bard AI. “[Alphabet] remains the leader in terms of potential for consumer facing product deployment of AI across its suite of desktop/mobile computer applications in the next 3-5 years,” Sheridan said. Goldman rates Alphabet as buy and has a price target of $154. This suggests about 14% upside from Wednesday’s close. Finally, Sheridan called out Meta Platforms , which is up 175% in 2023. The firm rates the Facebook parent a buy. Goldman’s $384 price target suggests upside of 15% from Wednesday’s close. The analyst said Meta will continue to be able to lean on its steady revenue growth supported by AI projects and video. Sheridan also pointed to Meta’s “consistent messaging on operating efficiencies as we move beyond 2023” as a bullish catalyst. — CNBC’s Michael Bloom contributed to this report.
