Meta, Amazon and Zynga Are Baird’s Top Internet Picks for 2022

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Zynga Headquarters in San Francisco

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David Paul Morris/Businesshala

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According to Baird analyst Colin Sebastian, the Internet will be a “menu of opportunities” for 2022.

For Sebastian, the top picks on next year’s menu are Meta Platform (ticker: FB), (AMZN) and Zyng a (ZNGA).

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“Investors tend to focus on short-term trends, near-term compass and macro effects, which outweigh longer-term secular growth drivers,” Sebastian wrote in a research note. “While we generally prefer companies with large TAMs [total addressable markets] And with strong engineering capabilities, we’re also factoring in near-term growth comp and margin trends.

Sebastian believes Meta stock has more room to outperform in 2022 as the company’s overall market share in online advertising increases, comps become easier, and reporting of new segments is key to the company. Spotlights the margins in the business. While there’s been much talk about Meta’s role in building the Metaverse in the future, he doesn’t expect the benefits to come from augmented/virtual reality until “years ahead.”

Amazon was one of Baird’s top mega-cap picks. Sebastian said the company will have smoother growth and the ability to take advantage of recent investments. Amazon’s Web Services (AWS) may also be well-positioned to meet the growing need to spend on cloud services, he added. is also one of these baron’s Top stock picks for the new year.

Sebastian wrote, “While the Street has been slow to embrace Amazon as a major beneficiary of digital transformation and there is a mixed shift toward recurring revenue, we feel that concerns over slow online retail growth and lower margins have largely contributed to the growth of the market.” has run its course.”

Wall Street has also been reticent to Zynga’s adoption, citing concerns over a lack of organic growth and headwinds in customer acquisitions — but Sebastian sees those weaknesses as a boon for opportunistic buyers. The analyst believes the stock is facing some tailwinds, including the monetization of mobile and cross-platform games and upcoming changes to Apple’s (AAPL) App Store policy. The stock has limited exposure to its current growth and margin expectations, Sebastian added.

Other bargain stocks highlighted by Sebastian include Corsair Gaming (CRSR), Voom (VRM), Playtica Holding (PLTK) and Alibaba (BABA). HI’s great stocks were Airbnb (ABNB) and Shopify (SHOP).

Sebastian said investors who aren’t too risk-averse might consider betting on controversial stocks that could see significant upside next year, such as Activision Blizzard (ATVI), Twitter (TWTR), and Voomer, Sebastian said.

Write to Sabrina Escobar at [email protected]


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