Meta Stock (NASDAQ:META)
With the significant surge in internet stocks this year, Evercore ISI analyst Mark Mahaney acknowledges the sector’s potential, albeit with a change in his preferences.
Previously, Mahaney regarded Meta Platforms Inc. (NASDAQ:META) as his top pick in this category. However, following a remarkable rally that has propelled the stock of Facebook’s parent company by nearly 150% throughout 2023, he now gives top priority to Uber Technologies Inc. (NYSE:UBER).
Uber shares have also experienced substantial growth, surging by 75% this year. Mahaney’s newfound enthusiasm for Uber stems from its robust potential for top-line growth compared to other internet companies, as well as its numerous value catalysts.
Of particular interest is Uber’s projected profitability based on Generally Accepted Accounting Principles (GAAP) in the second half of the year. A series of GAAP profits could eventually lead to its inclusion in the S&P 500 (SPX).
Mahaney expresses optimism about Uber’s business trends, highlighting potential earnings benefits resulting from a recovery in driver supply. Furthermore, he believes that Uber is likely to be relatively resistant to economic downturns from a demand perspective, given the inherent need for transportation, and it may even serve as a recession hedge from a supply perspective, considering driving as a quick side-hustle for many. Mahaney sets a target price of $75 for Uber shares.
Mahaney’s second pick is Amazon.com Inc. (NASDAQ:AMZN), which has climbed a spot in his rankings. Noting the company’s favorable comparisons going forward and its positioning in the advanced stage of the Cloud optimization cycle, Mahaney believes it is now the opportune time to invest in Amazon. He emphasizes the potential for increased demand in Cloud computing and storage solutions driven by augmented AI workloads, where Amazon Web Services (AWS) holds a strong market position. Mahaney sets a target price of $150 for Amazon shares.
Ahead of their upcoming earnings reports, Mahaney initiates tactical outperform calls on both Uber and Amazon shares. He underscores the significance of an outlook for accelerated AWS revenue growth as a major factor for Amazon’s future performance. While Meta no longer holds the top spot in Mahaney’s favor, he still views the stock positively, highlighting its cost-cutting efforts and potential for solid double-digit revenue growth driven by three under-appreciated product cycles. Mahaney sets a target price of $350 for Meta’s stock.
Featured Image: Pexels @ freestocks.org
Author Faith Yakubu 
