Baird: India's 'Internet Tiger' Is Beginning To Roar

• Baird's Colin Sebastian said that Amazon.com, Inc. AMZN, Facebook Inc FB and Google Inc GOOG are in prime position to benefit from India as an Internet growth market.
• Year-to-date, all three of these names have outperformed the NASDAQ 100, with Amazon gaining 70 percent, Facebook rising 19 percent and Google adding 17 percent.
• Sebastian argued that India is the "key intermediate-term growth market for every global Internet player, with Amazon, Google and Facebook already taking pole positions."

Think that Chinese growth will reverberate through the globe? Baird's Colin Sebastian disagrees – saying that a slowdown in China may actually be "India's gains." Inside the world's second most populous country, "fundamentals remain healthy," Sebastian said, pointing out that the economy is "expected to grow faster than China with the potential to develop a larger consumer class" within five or 10 years.

At the same time, the country is set to have the world's second-largest base of Internet users, driven by Android device penetration. By 2018, Baird forecasted that there could be 500 million Internet users. That is good for e-commerce, in general, and Amazon, in particular. Within 10 years, Baird suggested that India could become Amazon's second-largest market.

On social, Facebook will see opportunity, led by the fact that WhatsApp is the top app, according to Baird. "Practically everyone with a smartphone uses WhatsApp," Sebastian said. Google's India opportunity – on the other had – lies squarely in its search dominance.

Baird has Outperform ratings on Amazon, Facebook and Google.