The companies, based respectively in Mountain View and Menlo Park, Calif., depend on advertising for almost all of their revenue, and he see ad-spending growth decelerating.
Bazinet left his price targets unchanged, at $2,415 for Alphabet and $320 for Facebook.
“During [the] last 15 years, internet ads enjoyed three periods of accelerating growth: 2010 to 2012, ’15 to ’18 and today,” Bazinet wrote in a commentary.
“But, they also exhibited three periods of decelerating growth: ‘08 to ‘10, ‘13 to ‘15 and ‘18 to ‘20.”
So “even if bullish sell-side forecasts are right, the next wave of deceleration begins in the third quarter of 2021 (when year-on-year comparisons are tough) or the second quarter of 2022 (when two-year stacked growth rates peak),” he said.
“Recent shifts – from accelerating to decelerating growth – have typically not been bullish for multiples.”
Alphabet recently traded at $2,292, down 2.5%, and Facebook near $307, down 3.8%.
Strong ad sales in the first quarter lifted the stocks of both companies. In the past three months, Facebook shares have climbed 15% and Alphabet 11%.
Numerous analysts raised their share-price targets on Alphabet after its strong first-quarter earnings report last month.
Facebook also reported strong first-quarter earnings, with net income of $9.5 billion, or $3.30 a share, compared with $4.9 billion, or $1.71, a year earlier.