Evercore ISI’s Mark Mahaney has recently updated his list of tactical calls for the second-quarter earnings season, offering insights into the large-cap internet sector’s performance for the rest of the year. As the head of internet research at Evercore ISI, Mahaney remains optimistic about the sector, describing his outlook as “compound constructive” despite the tech sector’s significant rally in 2024.
In his latest note, Mahaney highlighted key changes to his list of top large-cap longs, with Alphabet and Uber Technologies rising to the top, and Shopify being added to the list while Amazon and Expedia Group were removed. Mahaney emphasized Alphabet’s potential for a modest beat in the second quarter, citing the company’s generative artificial intelligence integrations and the strength of YouTube as a streaming platform as catalysts for growth. Mahaney set a price target of $225 for Alphabet, indicating a 20% upside potential.
Uber, on the other hand, was promoted to the second position on Mahaney’s list, with the analyst countering recent concerns about the impact of autonomous vehicle rollouts on the company. Mahaney sees transportation networks like Uber as potentially benefiting from AV adoption, with Uber positioned as “THE demand aggregator for Mobility.” Mahaney has a $80 price target on Uber shares, suggesting a potential gain of over 10%.
Shopify, the latest addition to Mahaney’s list, was praised for being a best-in-class ecommerce platform business with a resilient long thesis. Mahaney’s $75 price target on Shopify shares indicates a nearly 17% upside potential, with the stock currently trading around 30% below its 52-week high.
While Mahaney remains positive on Amazon as a long call, he placed the e-commerce giant on his tactical underperform list due to concerns about meeting Wall Street’s expectations for operating income in the third quarter. Despite this, Mahaney believes Amazon is likely to post a slight beat in the second quarter, attributing any potential deviations from guidance to an “expectations trip-up” issue rather than fundamental concerns.
Overall, Mahaney’s updates reflect his bullish sentiment on the large-cap internet sector, with specific emphasis on Alphabet, Uber, and Shopify as top picks for potential growth and investment opportunities in the current market landscape.
