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Investing.com -- Jefferies told investors on Wednesday that they should focus on internet stocks with strong earnings visibility and standout EBITDA growth as the macro narrative fades into the background this quarter.
In a 2Q25 earnings preview note, the firm said, “We recommend owning names offering a combination of upside visibility and peer-leading EBITDA growth.”
They declared: “Macro is out, fundamentals are in.”
Zillow (NASDAQ:ZG) remains Jefferies’ top overall pick, while Uber (NYSE:UBER) is the firm’s top large-cap recommendation.
“We are most bullish into results on ABNB, ETSY, UBER, and Z,” Jefferies said. On Uber, analysts expect “high-teens Mobility growth and relatively sustainable incremental margins” to support the stock.
Airbnb also drew praise for its “conservative 2Q guidance,” which they said may set the stage for upside surprises in late Q2 and Q3.
Jefferies expects Etsy’s traffic to recover, saying a “recent moderation in traffic declines... could foreshadow a recovery in growth throughout 2H25.”
Meanwhile, analysts are cautious on Lyft (NASDAQ:LYFT) and Tripadvisor (NASDAQ:TRIP). “We are watching for any signs that pricing is deteriorating” at Lyft, while Tripadvisor’s traffic has deteriorated “-25% vs. -13% in 1Q,” raising concerns over its core revenue outlook.
Zillow is expected to post its 15th consecutive revenue and EBITDA beat, driven by strong growth in Showcase, multi-family rentals, and mortgage.
Jefferies said it is also looking for signs that Real Time Touring is helping Zillow’s Premier Agent business outperform.
Jefferies highlighted strong ad checks at Reddit, saying it is “positioned to deliver Rev/EBITDA upside,” while also noting that a rebound in daily active users would support the long-term outlook.
Overall, Jefferies is urging investors to “own strength” as fundamentals retake center stage.