Cantor Fitzgerald initiated coverage of 22 stocks in its global Internet sector, selecting several names as Top Picks as the firm weighs the macro/micro risks ahead against accelerated AI implementations that will benefit fundamentals.
“Although “Given that Internet companies’ performance has been strong over the past 18 months, Internet companies’ valuations are quite reasonable and should benefit from expectations of upcoming rate cuts, tempered by slowing revenue growth and as the benefits of widespread cost cutting fade,” Cantor said in Thursday’s research report.
Meta Platforms (NASDAQ:META) is initiated with an Overweight rating and added to Cantor’s Top Picks list because the company has “many levers to capture share gains” as AI implementation can drive incremental share, monetization, and revenue growth over the next 2-3 years.
Free Market (NASDAQ:MELI) also has an Overweight rating and is one of Cantor’s top picks, based on the company’s strong fundamental outlook in both fintech and e-commerce and ability to expand margins from current levels of offerings in advertising, credit, and financing. And despite recent growth, Cantor estimates that MercadoLibre only accounts for a mid-single-digit percentage of total retail sales in Brazil compared to ~10% for Amazon (AMZN) in the US.
Another great option, Overweight-rated DoorDash (NASDAQ:DASH), continues to deliver strong gross order value growth even as the company’s scale reached roughly 5% of consumer restaurant spending. This was achieved through new categories, deployment frequency, and strong habituation from existing customers. Cantor expects to see a “decent chance” of positive GOV/EBITDA revisions over the next few quarters, which should continue to provide support for the stock.
Cantor also initiated Amazon (AMZN), Uber Technologies (UBER), Pinterest (PINS), Wix.com (WIX) and Maplebear (CART) with an Overweight rating.
Alphabet (GOOG), Booking Holdings (BKNG), Shopify (SHOP), Spotify Technology (SPOT), The Trade Desk (TTD), eBay (EBAY), GoDaddy (GDDY), Expedia Group (EXPE), Snap (SNAP), Zillow Group (ZG), Etsy (ETSY), and Lyft (LYFT) all started with a Neutral rating.
Airbnb (ABNB) and Thomson Reuters Corporation (TRI) started out Underweight.