According to Needham analyst Laura Martin, Google is positioned as the top large-cap stock pick for 2024. Martin highlights Google's commanding presence in the global digital advertising market, where it captured $237 billion in ad revenue in 2023, representing 38% of global digital ad spending.
A key driver of Google's recent success is YouTube, which became the most-streamed site in the U.S. in the second half of 2023, thanks to exclusive rights to NFL Sunday Ticket. This surge in viewership has propelled rapid subscription revenue growth and diversified Google's revenue streams.
Martin believes Google's proprietary large language models (LLMs) will be the primary value driver over the next three to five years. Google Cloud (GCS) poised to benefit from both the LLMs and the applications built on them.
"GenAI necessitates a continuous influx of millions of data points daily to maintain LLMs' relevance, and GOOGL outpaces its competitors in data ingestion, leveraging its Search and YouTube platforms," Martin said.
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