Core Viewpoint - Meta Platforms and Amazon are expected to rebound in 2026 after underperforming in the current year, with a focus on which stock is more suitable for investors' portfolios [1][2]. Group 1: Amazon's Growth Potential - Amazon has multiple growth levers, including its online marketplace, Amazon Web Services (AWS), online ads, and AI chips, providing a diversified revenue stream [4]. - AWS sales grew by 20% year over year in Q3, while advertising revenue increased by 24% year over year, contributing to Amazon's profit margins [6]. - Amazon's AI agents have significantly improved operational efficiency, saving over 700,000 hours of manual work and providing substantial cost savings for businesses [7]. - The Trainium2 AI chips segment grew by 150% quarter over quarter, establishing itself as a multibillion-dollar business with long-term growth potential in AI [8]. Group 2: Meta Platforms' Performance - Meta Platforms achieved a 26% year-over-year revenue growth in Q3, outpacing Amazon's 13% growth, and has a more attractive price-to-earnings ratio of 29.8 compared to Amazon's 32.8 [11]. - Daily active users on Meta's social networks increased by 8% year over year, indicating continued user engagement [12]. - Meta is focusing on wearable technology, particularly AI glasses, which could diversify its revenue sources beyond online ads and potentially generate billions in additional revenue [14]. Group 3: Comparative Analysis - While both companies have strong growth prospects, Meta Platforms is viewed as the better growth stock due to its higher revenue growth rates and lower valuation [15]. - Amazon's growth is supported by its diverse business segments, but Meta's advancements in AI glasses could provide a significant new revenue stream [16].

Core Insights - Amazon has launched a new AI-powered shopping feature called Interests, aimed at enhancing product discovery through personalized search experiences [1][2] - The feature utilizes large language models to convert everyday language into search queries, improving the relevance of product recommendations [2] - Interests is currently available to a select group of U.S. customers, with plans for broader access in the coming months [3] Financial Performance - Amazon reported $187.8 billion in revenues for Q4 2024, reflecting a 10% year-over-year growth, and $21.2 billion in operating income, a 61% year-over-year increase [4] - The Zacks Consensus Estimate for Amazon's 2025 net sales is $697.68 billion, indicating a growth of 9.36% from the previous year, with earnings estimated at $6.32 per share, a 14.29% increase [9] AI Integration and Strategy - The launch of Interests adds to Amazon's suite of AI-powered tools, which includes the Rufus shopping assistant and AI Shopping Guides, showcasing the company's commitment to enhancing customer experience through personalization [5] - Amazon's focus on AI innovation is further supported by developments in AWS, including Trainium2 AI chips that offer 30-40% better price performance than current GPU alternatives [4] Competitive Landscape - The e-commerce sector is becoming increasingly competitive, with companies like Google enhancing their shopping experiences through AI technologies [6] - Amazon's first-mover advantage in AI-powered shopping tools, combined with its extensive product selection and logistics capabilities, positions it favorably against competitors like Alibaba and eBay [7] Investment Outlook - While Amazon's AI innovations show long-term potential, investors may consider holding current positions or waiting for more favorable entry points in 2025 [8][14] - The company faces increased capital expenditures, with Q4 investments reaching $26.3 billion, which may pressure margins in the near term [10]