JPMorgan reveals top large- and small-cap internet picks for 2025

JPMorgan has revealed its top internet picks for 2025, which include both Big Tech names and small-cap stocks. As reported in Benzinga, the bank believes that enhanced engineering efficiency, billions in AI revenue for Amazon Web Services and Google Cloud, and accelerated ad and search growth for Meta and Google, along with a pro-business political climate and stabilization of the economy, will bolster growth in the internet sector.

Large-cap favorites

JPMorgan’s top large-cap internet picks for 2025 include Amazon, Meta Platforms, Alphabet (Google’s parent company), and Spotify, reported Seeking Alpha. JPMorgan noted that 2024 marked the second consecutive year of “very strong performance” for mega- and large-cap internet stocks. They see AI remaining the key investment focus in 2025, with tech giants continuing to boost AI-driven capital expenditures.

JPMorgan analyst Doug Anmuth projects that in 2025, Amazon will invest $97 billion in these technologies, Meta will spend $64 billion, and Alphabet $62 billion, reported Benzinga. While these investments might temporarily pressure profit margins, Anmuth sees them paying off in the long run as AI shifts to practical applications, spurring growth in advertising, cloud services, and software tools.

Small-cap favorites

In the small- and mid-cap space, JPMorgan highlights video game developer Take-Two (the owner of Rockstar Games, the studio behind the iconic Grand Theft Auto video game) and Xometry (a custom manufacturing marketplace with a $1.2 billion market capitalization). The bank pointed out that small-and-medium-cap internet names have underperformed mega- and large-cap stocks for three consecutive years. JPMorgan is more optimistic about 2025, citing lower interest rates, the fact that smaller firms make more of their revenue in the U.S. and are less vulnerable to potentially higher tariffs, and a heating-up of the capital markets, including a more active M&A environment.

JPMorgan has also raised its target price for Take-Two from $195 per share to $225 per share, while reiterating its “overweight” rating (equivalent to a “buy” recommendation). This new target price implies upside of nearly 25% versus the closing price on Wednesday, December 18. For the year to date, Take-Two stock is up 13%, lagging the main U.S. market index, the S&P 500, which has doubled up that gain.

In December, Citi and BMO Capital also raised their target prices for Take-Two to $225 per share and $240 per share, respectively, and reiterated their “buy” ratings. Citi expects the release of a new GTA game to significantly boost holiday sales in 2025, while BMO Capital points to new monetization strategies that can be incorporated into the game. Out of the 28 analysts covering Take-Two, 22 have a “buy” recommendation, with the rest rating it a “hold.”

Xometry has also received a rating and target price upgrade from JPMorgan. The investment bank has upgraded it to “overweight” and nearly doubled its target price from $25 per share to $45 per share, implying 22% upside versus the last closing price. On Wednesday, December 18, Xometry stock reached its highest level in two years but closed down 1% amid a broader market dip following the Fed’s 2025 forecast. Since the start of the year, Xometry stock has gained 2.5%. According to MarketWatch, among the 10 analysts covering Xometry, there are seven “buys,” two “holds,” and one “sell.”