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Investing.com -- Mizuho has initiated coverage of U.S. internet stocks, highlighting online advertising as the strongest area for growth and picking Meta Platforms as its top recommendation.
“We are particularly bullish on the online advertising space broadly, driven by several themes, most notably AI driving more user engagement, better advertising efficacy, helping expand the addressable market, and on the cusp of benefiting from a wave of customer acquisition spending from AI native companies,” the analysts wrote.
Mizuho said its “favorite stocks include Meta Platforms (OP, $925 PT, Top Pick), Amazon (OP, $300 PT) and Pinterest (OP, $50 PT).”
The firm added, “We believe our most out-of-consensus call is our Outperform on Airbnb (OP, $151 PT).”
In online advertising, Mizuho said, “Our favorite name is Meta Platforms (+24% to TP), followed by Pinterest (+49% to TP) and Alphabet (+20% to TP). All OP names benefit from themes we like in the space, particularly Meta where AI is entirely offensive.
“We believe this sector broadly has the most tailwinds from scaling AI in our coverage.”
On e-commerce, the analysts cited Amazon’s “expansion of AWS infrastructure, poised to benefit from the scaling AI inference opportunity and on expanding retail margins, driven by improving efficiency and fast-growing advertising.”
In rideshare, Mizuho preferred DoorDash and Uber but flagged Lyft and Instacart, where “we see competitive risk as an overhang for both.”
For online travel, the firm said, “We like Airbnb (+22% to TP) on the push into hotel, which stands to unlock a significantly larger market and can drive accelerating top line in 2027.”