Baird Picks Amazon, Meta, Zynga As Top Internet Picks For 2022

  • Internet investors remain primarily focused on shorter-term trends, near-term growth comps, and macro influences, rather than secular growth drivers, heading into 2022, Baird analyst Colin Sebastian tells.
  • Sebastian assumes that forward-year growth comps and margin trends will mainly drive near-term sentiment and less by the size of total addressable markets or secular growth themes.
  • With this in mind, Sebastian transitioned his large-cap pick from Alphabet Inc GOOG GOOGL to Inc AMZN and Meta Platforms Inc FB.
  • Sebastian also changed his top small/mid-cap picks from ChannelAdvisor Corp ECOMCarvana Co CVNA, and Take-Two Interactive Software Inc TTWO to Zynga Inc ZNGA.
  • Additionally, Sebastian warmed to a few others, including Twitter Inc TWTR and Vroom Inc VRM.
  • For Meta, Sebastian expects more positive commentary on core advertising trends in 2022.
  • On Amazon, he says the company is a crucial beneficiary of digital transformation and a mix shift towards recurring revenues.
  • For Zynga, Sebastian sees potential positive catalysts from easing Identifier for Advertisers headwinds and ramping monetization of new titles.
  • Price Action: AMZN shares traded higher by 0.20% at $3,420 in the premarket session on the last check Wednesday.
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