One major technology giant is getting a ton of love on Wall Street just three days into 2024. Five analysts named Amazon a top pick in a one-day period as its web services division reaccelerates, advertising spending strengthens and the e-commerce giant rides the ongoing generative artificial intelligence wave. “We see most upside for AMZN among our large caps into ’24,” wrote Piper Sandler’s Thomas Champion. “Retail margins have improved significantly and we still think Street op income looks conservative into ’24 on incremental numbers.” AMZN 1Y mountain Amazon’s stock performance over the last year Amazon, similar to many of its mega-cap peers, is coming off a strong 2023 that saw shares surge nearly 81% as investors bet on AI and 2022’s fallen technology stocks . Key to Amazon’s growth story in 2024 is the expected strong advertising spending with the presidential election in November and the Olympics in Paris this summer. The ramp up in advertising partnerships as Prime Video rolls out the initiative should also aid growth in 2024, wrote Bank of America’s Justin Post. He projects that advertising revenue could contribute 370 basis points to North American margins and still have more room to run. Last year, Amazon earned the reputation of falling behind some of its mega-cap peers on the AI front as competitors unveiled their latest chatbots and large language models. The company’s cloud unit followed up in November with its own chip to train AI models , which D.A. Davidson’s Gil Luria views as strength that makes it less dependent on dominant chipmaker Nvidia. “While we expect MSFT Azure to grow faster than AMZN in 2024, we believe from an absolute dollar standpoint AWS may continue to make similar gains,” he wrote. “AWS will remain the largest hyperscaler and eventually close the gap to Azure in GenAI capabilities, leveraging an investment in Anthropic and longstanding investments in custom silica.” Some on Wall Street, including Wells Fargo’s Ken Gawrelski, view enterprise AI as a 2025, or 2026, story for the company. Even so, he estimates it could account for 7% of total AWS revenues in 2024. Beyond AI and advertising spending, Gawrelski views a potential reacceleration in AWS growth to 17% after a 2023 bottom as another positive for Amazon in the new year. Buy side expectations may look high after Amazon’s strong rally post third-quarter earnings, but positive revisions could boost shares for further outperformance, said Wolfe Research’s Deepak Mathivanan. He continues to see a runway for retail margin expansion as companies pivot from offline channels. “See ’24 as continuation of 2H23: healthy overall eCommerce trends offset by heightened cross-border competition,” said Wells Fargo’s Gawrelski. — CNBC’s Michael Bloom contributed reporting.