Bernstein Analyst Picks Amazon and Meta as Top 2026 Tech Stocks After 2025 Lag

TLDR

• Bernstein analyst Mark Shmulik named Amazon and Meta as top large-cap tech picks for 2026 after both stocks underperformed the S&P 500 in 2025
• Amazon stock rose 12.8% in 2025 while Meta gained 5.5%, compared to the S&P 500’s 19.4% surge
• Shmulik expects AWS to accelerate growth through Project Rainier, a massive AI supercomputer with nearly 500,000 Trainium2 chips
• Meta’s Q3 earnings sparked sell-off after announcing higher 2026 capex forecast for AI and data center investments
• Shmulik set $300 price target for Amazon (21.7% upside) and $870 for Meta (35.5% upside)

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Bernstein analyst Mark Shmulik has selected Amazon and Meta Platforms as his top large-capitalization technology stock picks for 2026. Both companies underperformed the broader market in 2025.

Amazon stock rose 12.8% over the past year. Meta gained only 5.5% during the same period. The S&P 500 index surged about 19.4% in comparison.

Amazon.com, Inc., AMZN

Shmulik maintained his “Buy” rating on both stocks in a Monday client note. The analyst outlined expectations for 2026 and emphasized a shift in investor focus from AI model performance to actual adoption of AI tools.

Amazon Web Services Growth Expected Through Project Rainier

Shmulik expects Amazon to change the perception that its Amazon Web Services cloud unit trails competitors in securing AI-related business. He attributed Amazon’s weak 2025 stock returns to sluggish AWS growth compared to peers and flat retail operating income.

The analyst also pointed to tariff challenges and a lack of major product launches or partnerships. For 2026, he expects AWS to accelerate after topping net new bookings in Q3 2025.

Project Rainier is driving the optimism for AWS growth. The massive AI supercomputer launched in late 2025 and is powered by nearly 500,000 Trainium2 chips across U.S. data centers. The infrastructure is designed for hyperscale AI training.

Shmulik believes retail margins will improve through cost-cutting layoffs, efficiency gains, and robotics adoption. He kept his $300 price target on Amazon stock, which implies 21.7% upside potential from current levels.

Amazon stock rose slightly to 248.05 in midday trading. Shares have gained for six consecutive trading days and are trading within a cup base that has a buy point of 258.60.

Meta Faces Higher Risk But Offers Highest Upside Potential

Shmulik highlighted that Meta has the highest overall upside among the stocks he covers. The stock carries higher risk compared to other picks, according to the analyst.

Meta is still recovering from a post-earnings sell-off after its Q3 report on October 29. The social media giant surprised analysts by raising its 2026 capital expenditure forecast. The company is investing heavily in data centers to develop AI-powered superintelligence.

Meta’s push into frontier-model development triggered a major reset in 2025 spending, earnings per share, and free-cash-flow expectations. Shmulik described it as a “coin flip” whether the company can catch up to peers and deliver a best-in-class model early in 2026.

The bear case is that Meta’s model benchmarks “close-but-not-quite” to peers. This could force endless investments over an undefined timeline just to close the gap.

Shmulik expects Meta’s intense capital expenditure growth to peak this year. The tech giant has already proven it can grow and monetize AI products without leading in large language models.

Meta stock dipped slightly to 648.76 in midday trading. Shares are hovering just above Meta’s 50-day moving average but remain below the 200-day line. The company announced Monday that it named Dina Powell McCormick as its president and vice chair to help oversee its AI push.

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