Investing.com -- Cantor Fitzgerald initiated coverage of 22 global internet stocks in a note Wednesday, naming Meta Platforms (NASDAQ:META), MercadoLibre (NASDAQ:MELI), and DoorDash (NASDAQ:DASH) as its top picks.
The firm told investors it sees strong opportunities in these companies driven by AI advancements, share gains from offline channels, and improving unit economics, despite acknowledging macroeconomic risks that could bring volatility to medium-term free cash flow growth.
Meta Platforms (META): Cantor assigned an Overweight rating and a $660 price target for META, implying a 27% upside.
The analysts believe that Meta's business has "plenty of levers to capture share gains and generate healthy top-line growth" above a mid-teens compound annual growth rate (CAGR) over the next two to three years.
Despite skepticism around the return on investment in AI, the firm argues that Meta's current valuation, at 20 times FY25E earnings, embeds "AI skepticism and some probability of a recession" already. They see the potential for further upward estimate revisions.
MercadoLibre (MELI): The firm assigned MELI an Overweight rating with a $2,530 price target.
Cantor analysts are bullish on MELI's prospects in both fintech and eCommerce, expecting its gross merchandise volume and total payment volume to grow at +17% and +20% CAGR, respectively.
They forecast 140bps+ margin expansion annually between FY24E and FY26E, believing valuation has room to expand with positive revisions.
DoorDash (DASH): With an Overweight rating and a $160 price target, Cantor sees a 24% upside for DoorDash.
The firm expects DoorDash to sustain growth in gross order value driven by user growth, frequency gains, and new product adoption, alongside expanding EBITDA margins.
Despite concerns about an economic slowdown, Cantor notes DoorDash's strong customer habituation could mitigate recession risks.