Market Strategists Expect These 2 Magnificent 7 AI 'Sleepers' To Outperform Apple Stock In 2024

Wedbush raised its price target on Apple Inc AAPL this week, as the firm anticipates outperformance in 2024, but some are expecting market outperformance to come from a couple of other mega-cap tech stocks next year. 

What To Know: Wedbush analyst Dan Ives maintained Apple with an Outperform rating and raised the price target from $240 to $250, naming the stock his "Top Tech Pick" for next year. 

Apple is set to become the world's first $4-trillion company on the back of strong iPhone sales in the holiday quarter that could continue into the March and June quarters, in the analyst's view. 

Why It Matters: Monday on CNBC's "Fast Money Halftime Report," Virtus Investment Partners' Joe Terranova said that Alphabet Inc GOOG GOOGL and Amazon.com Inc AMZN could outpace Apple in 2024. 

He suggested the investment opportunity lies in generative artificial intelligence beneficiaries the market has somewhat overlooked.

"I think the two sleepers for 2024 that actually can outperform Apple would be Amazon and Alphabet," Terranova said.

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He told CNBC that he expects the share prices of both Alphabet and Amazon to get a boost from generative AI next year. That's not to say that Apple still can't perform well, he added. 

"Apple is quality growth. I like quality growth ... but I think in '24, Apple might take a little bit of a backseat in the Mag 7," Terranova said. 

Cerity Partners' Jim Lebenthal chimed in, noting that he agreed with everything Terranova was laying out. He highlighted the recent launch of Google's Gemini AI and suggested Alphabet could even be considered a value stock given its price. 

At 20 times forward earnings, investors are getting a lot of cushion to the downside, he said. 

Both Terranova and Lebenthal expect investors to continue to put dollars to work in the Magnificent 7 next year, but they agree that money is likely to be rotated into some of the mega-cap tech names that were underappreciated in 2023. 

AAPL, GOOG, AMZN Price Action: At the time of writing, Apple shares were down 1.43% at $192.92, Alphabet Class A shares were down 1.7% at $134.32 and Amazon shares were down 1.32% at $145.48, according to Benzinga Pro.

Photo: courtesy of Apple.