Wedbush on Thursday named Alphabet (GOOGL), Uber (UBER), Reddit (RDDT), and Xometry (XMTR) its top internet stock picks across different market-cap categories, with analyst Ygal Arounian calling artificial intelligence (AI) the "single most impactful swing factor" shaping the sector's outlook.
The firm stated that the companies with the “strongest combination of technology, product, and distribution” are best positioned to benefit as AI reshapes the internet industry.
Wedbush's preferred names outperformed in pre-market trade, given that the Nasdaq-100 tracking (QQQ) fell 0.83% in premarket trading, while the (SPY) slipped 0.26%.
and UBER shares rose nearly 1% each. RDDT stock edged 0.25% higher, while XMTR shares traded flat.
The Big Three: Alphabet, Amazon, Meta
Among the mega-cap internet names, Wedbush named Alphabet its top pick with an ‘Outperform' rating and a $445 price target, implying a potential 20% upside from Wednesday's close of around $370.
Retail sentiment on Stockwits around GOOGL’s stock rose to ‘bullish’ from ‘bearish’ territory over the past day, accompanied by chatter at ‘normal’ levels.
Amazon (AMZN) shares also received an ‘Outperform’ rating with a $293 price target, representing about 15% potential upside from a $254 closing price in the previous session.
Meta Platforms (META) was the only mega-cap to receive a ‘Neutral’ rating. While Wedbush assigned a $671 price target, that sits below Wednesday's closing price of $681, implying limited near-term upside after the stock's strong rally.
AMZN’s stock moved 0.6% higher in pre-market trade, while META’s stock edged 0.14% higher. On Stockwits, retail sentiment around META remained in ‘bullish’ territory over the past day, while sentiment around AMZN improved to ‘bullish’ from the ‘neutral’ zone.
Uber, Reddit, Xometry Lead Across Their Categories
Wedbush selected Uber as its preferred large-cap internet stock, assigning an ‘Outperform’ rating and a $91 price target, implying approximately 27% upside from Wednesday's close of around $72.
Instacart (CART) also earned an ‘Outperform’ rating with a $59 target, representing roughly 24% upside from Wednesday’s close of around $47. By comparison, DoorDash (DASH) received a ‘Neutral’ rating despite a $205 price target, leaving only about 8% upside from Wednesday's close of $190. DASH’s stock edged 0.4% higher in pre-market trade, while CART’s stock traded flat.
Retail sentiment around UBER and DASH on Stocktwits trended in ‘bearish’ territory over the past day, while sentiment around CART fell to ‘neutral’ from the ‘bullish’ zone.
Among social platforms, Reddit was Wedbush's top mid-cap pick. The firm assigned an ‘Outperform’ rating and a $250 target, implying about 26% upside from a closing price of $198 in the previous session. Pinterest, meanwhile, received a ‘Neutral’ rating with a $24 price target, reflecting far more modest expected gains than Reddit.
For small-cap internet stocks, Wedbush named Xometry its preferred pick, initiating coverage with an ‘Outperform’ rating and a $126 price target, implying nearly 28% upside.