The new year could be another strong one for internet stocks, and BMO Capital Markets picked its favorites for investors looking to capitalize. Analyst Brian Pitz highlighted Amazon as the firm’s top pick for 2025 and named Netflix , Trade Desk and Google parent Alphabet as other well-positioned names in the internet and interactive entertainment space heading forward. “Our top Internet pick this year is Amazon, with a multi-year AI/IT workload shift towards AWS, given its leadership position across the full stack. Retail FCF unlock will continue, given +30% frequency growth and moderated Capex spending for [fulfillment centers],” Pitz said in a note to clients earlier this month. He said Amazon’s Warehousing and Distribution and Multi-Channel Fulfillment business “unlocks fulfillment capabilities across social channels” and propels the company’s offerings in off-platform shopping, which refers to customers buying products through platforms outside Amazon’s specific platforms. The company’s same day and next-day delivery options add to its leadership in the e-commerce space, he said, noting that competitive pressure from Temu “appears to be easing.” Amazon’s AI capabilities within its cloud business are another major catalyst, according to Pitz. He noted that Amazon Web Services offers a range of AI chips and foundational models for clients, including custom chips Inferentia and Trainium, in addition to Nvidia chips. Amazon shares are up roughly 45.5% this year. Alphabet’s set to benefit next year as AI leads to search monetization improvements, according to Pitz. The company’s had a controversial year and trailed some of its megacap peers but still saw steady revenue growth in its search ads and cloud businesses. The stock is up more than 37% year to date. “We once again place GOOGL as a Top Pick as Search appears de-risked with better-than-expected Gemini adoption and fading regulatory overhang,” Pitz said. “Google will begin repealing multiple DoJ trials, AI legislation will evolve, and AV oversight will loosen.” GOOGL 1Y mountain Google stock this year. Advertising technology company Trade Desk, which BMO expects to also lead the advertising market next year, has added 67.5% in 2024. In video games, Pitz sees Take-Two Interactive Software as the clear winner. He thinks its Grand Theft Auto VI launch could be “the highest-grossing video game title of all time” after selling 45 million units in its launch window next year. That, the analyst said, implies 36% growth from GTA V’s launch window. “TTWO (Top-Pick) is the best-positioned publisher with a robust launch slate headlined by GTA VI. TTWO remains our top pick in the video game space into 2025, supported by the Fall 2025 launch of GTA VI,” Pitz said. “Beyond GTA VI, TTWO has the most attractive near-term pipeline of content, underscored by sequel content from proven franchises like Mafia and Borderlands, giving our confidence that TTWO can deliver against expectations. We believe TTWO has the clearest upside to numbers opportunity.”
