RBC's Mahaney: There Is Now A More 'Robust' And 'Positive' Sentiment In The Internet Sector

Speaking as a guest on CNBC's "Squawk On The Street" segment on Thursday, the analyst added that sentiment is also "more robust" now than it has been over the past two to three years.

He continued that there are a few "controversial" names heading into earnings season with "risks to estimates." Most notably, Twitter Inc TWTR was likely plagued by the ongoing M&A rumors, which usually leads to employees being distracted and unable to close deals with clients.

Second, many of Akamai Technologies, Inc. AKAM's key customers are "transitioning away" from the computer.

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Third, Tripadvisor Inc TRIP has reported "choppy" earnings quarters as it transitions its business to mobile, and this trend will likely continue for another year or two.

Google And Amazon

Mahaney's coverage universe also includes some of the most notable internet companies in the world: Alphabet Inc GOOG GOOGL, which is his second top pick, and Netflix, Inc. NFLX, his top pick in the space.

Mahaney noted that there is an ongoing "deceleration debate" involving Google and some investors are working under the assumption that Google's "growth rate has to slow down in the back half of this year." However, the analyst believes there is enough "search innovations that are still going on."

Mahaney added that Alphabet holds other "great assets" including YouTube, Google Cloud and Google Play that are "growing materially faster." As such, Alphabet is the analyst's second top pick after Netflix.

If Netflix can "settle down" its U.S. churn and offer an outlook that includes accelerated subscriber growth in 2017 versus 2016, then there is the opportunity to rise the most versus its large-cap internet peers.

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