Goldman Sachs in a Monday report assigned buy ratings to seven Internet-related large-cap stocks and sell ratings on two others.
The buys are Amazon (AMZN) - Get Amazon.com, Inc. Report ($4,250 price target), Facebook (FB) - Get Facebook, Inc. Class A Report ($455), Alphabet (GOOGL) - Get Alphabet Inc. Class A Report ($3,350), Snap (SNAP) - Get Snap, Inc. Class A Report ($90), Uber (UBER) - Get Uber Technologies, Inc. Report ($64), Lyft (LYFT) - Get Lyft Inc Class A Report($64) and Expedia (EXPE) - Get Expedia Group, Inc. Report ($185).
“The industry still has ample opportunities for secular revenue growth and increased operating efficiencies on the back of building scale in the coming years,” writes Goldman analyst Eric Sheridan.
“Over the near term (second half of 2021), we still see a broadly constructive environment in specific subsectors that supports our forward operating estimates being in line to ahead of [Wall Street] estimates, … with the most pronounced upside in digital advertising.”
Despite these positive factors, “we are not uniformly bullish,” Sheridan said. Some companies “have forward growth more than priced into their equity at current levels.”
Here are seven of Goldman’s top 10 themes for the Internet.
1. “The line between commerce and advertising is blurring.
2. “The rise of the creator economy.
3. “Subscriptions becoming the hallmark of consumer and platform utility but consumer fatigue remains open-ended.
4. “The growth and competitive landscape for cloud computing.
5. “The next computing wave is likely augmented reality – here comes the metaverse.
6. “Regulation impacts costs in coming years; scaled players better positioned to absorb.
7. “Watch for the rise of the decentralized web.”