TLDR
- Bernstein’s Mark Shmulik selects Amazon and Meta as leading large-cap technology investments for 2026
- Both stocks underperformed S&P 500 in 2025 with Amazon up 12.8% and Meta up 5.5% versus index’s 19.4% gain
- Amazon price target set at $300 (21.7% potential gain) while Meta target reaches $870 (35.5% potential gain)
- AWS expected to benefit from Project Rainier supercomputer featuring 500,000 Trainium2 chips for AI training
- Meta’s increased capital spending on AI infrastructure positions company for potential market-beating returns
Bernstein analyst Mark Shmulik has designated Amazon and Meta Platforms as his preferred large-capitalization technology investments for 2026. The recommendation follows a year where both companies trailed the broader market.
Bernstein Says Amazon and $META Are Ready to Outperform in 2026 📈
The analyst names $AMZN and $META as its top 2026 tech picks, calling both undervalued after lagging the S&P 500 $SPY in 2025, with upside tied to AWS AI growth and Meta’s data center buildout 🚀 pic.twitter.com/9Y2rE4uqiN
— Trader Edge (@Pro_Trader_Edge) January 13, 2026
Amazon shares advanced 12.8% throughout 2025. Meta Platforms posted a 5.5% increase during the same period. The S&P 500 delivered a 19.4% return in contrast.
Shmulik maintained “Buy” ratings on both companies in Monday’s client communication. The analyst anticipates a market shift toward evaluating AI tool adoption rather than focusing solely on model capabilities.
Project Rainier Powers Amazon Cloud Growth Expectations
Shmulik projects Amazon will reverse negative sentiment surrounding its cloud computing division’s AI business performance. The analyst attributed Amazon’s 2025 stock weakness to AWS growth rates below competitors and flat retail margins.
Limited high-profile product launches and partnership announcements also dampened investor enthusiasm. AWS recorded the highest net new bookings in Q3 2025, establishing momentum heading into this year.
Project Rainier serves as the primary catalyst for anticipated AWS acceleration. The AI supercomputer infrastructure deployed in late 2025 incorporates nearly 500,000 Trainium2 chips distributed across U.S. data centers. The system enables large-scale AI model training operations.
Retail division margins should improve through workforce reductions, operational efficiency enhancements, and expanded robotics deployment, according to Shmulik. The $300 price target represents 21.7% appreciation potential from current trading levels.
Amazon shares reached 248.05 during midday trading. The stock has recorded positive sessions for six consecutive trading days.
Meta Positioned as Top Recovery Trade Among Tech Giants
Meta Platforms presents the greatest upside opportunity within Bernstein’s coverage area. The investment carries higher risk compared to other recommendations, Shmulik acknowledged.
The stock remains in recovery mode following October 29 third-quarter earnings results. Meta exceeded analyst projections for 2026 capital expenditure guidance during that report. The elevated spending targets data center construction and artificial superintelligence research.
Meta’s entry into advanced AI model development necessitated substantial revisions to 2025 financial projections including spending, earnings, and cash flow estimates. Shmulik described the company’s competitive positioning as uncertain regarding early 2026 model performance versus rivals.
A negative outcome would see Meta’s AI capabilities falling short of competitors. This scenario could require extended investment periods without clear timeline resolution.
The analyst expects Meta’s capital expenditure growth rate to reach maximum levels in 2026. The company has already demonstrated profitable AI product development without possessing leading large language model technology.
“Meta is the most compelling Magnificent Seven catch-up trade for 2026 in our eyes,” Shmulik wrote. The $870 price target suggests 35.5% upside opportunity.
Company Developments and Trading Updates
Meta shares declined to 648.76 in midday activity. The stock trades above its 50-day moving average but remains beneath the 200-day trend line.
Meta announced Monday the appointment of Dina Powell McCormick as president and vice chair. McCormick will participate in overseeing the company’s AI strategic initiatives.
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