UBS: AT&T (T.US), Amazon (AMZN.US) and Spotify (SPOT.US) are preferred TMT stocks for 2024

UBS analysts named AT&T (T.US), Amazon (AMZN.US) and Spotify (SPOT.US) as the top TMT stocks to hold in 2024.

AT&T is UBS' top pick in the cable, satellite and telecom services space. UBS believes AT&T is positioned to maintain EBITDA growth while maintaining low churn, ongoing fiber revenue, pricing power and cost control. The firm said the company is on track to hit the high end of its 2024 free cash flow guidance range ($17 billion to $18 billion).

Amazon is UBS' top pick in large internet stocks. UBS said GMV growth and efforts to regionalize delivery should prompt consumers to consider faster delivery speeds and higher levels of service, while margin expansion in niche markets should put Amazon's stock in a good position. The firm added that Prime Video with ads could be a catalyst for high profitability.

Spotify is UBS' top pick in media stocks. UBS said: "We believe the recovery of monetization in the music industry is still in its early stages, and we expect Spotify to maintain its industry leadership in digital service platforms (DSPs). We believe the continued user growth and better monetization of existing user bases will drive revenue growth for the company." The firm also said: "After years of breakeven, we believe Spotify can continue its recent pace of margin expansion, driving a transformation in EBITDA in the coming years."