Source: Zhitong Finance
Author: Zhao Jinbin

Piper Sandler released its forecast for internet stocks on Monday to prepare for the third-quarter earnings season. The research company says it is the most optimistic $Alphabet-A (GOOGL.US)$ ,$Pinterest (PINS.US)$und$Reddit (RDDT.US)$, and yes$Amazon (AMZN.US)$und $Snap Inc (SNAP.US)$ Take a cautious approach.

The research firm added that Google is its preferred stock, and the company expects third-quarter revenue of $86.5 billion and operating profit of $26.5 billion. “Ad checks are positive, and Gemini's integration with search is driving higher spending through increased efficiency. We think antitrust concerns are already reflected in stock prices. Additionally, we love the new CFO Ashkenazi and see opportunities to reduce operating costs/manpower.”

Amazon remains Piper's top pick in the large-cap market, but the research firm had mixed feelings about the stock's prospects when it released the report. They expect Amazon's third-quarter revenue to be around $157 billion (up 10% year over year) and operating profit of $14.8 billion. For the fourth quarter, revenue is expected to be between $180-186 billion and EBIT between $16-18 billion. “The third-quarter guidance broke profit margin growth, and Wall Street's expectations for the company's NTM EBITDA declined for the first time in 5 quarters. On the advertising side, our buyers indicated that Amazon still has the best attribution, but lack of inventory growth driving higher CPCs is a limiting factor for further scaling up spending.”

Regarding Pinterest, Piper believes it is worth buying the stock and said that it expects third-quarter revenue of 0.892 billion US dollars (up 17% year over year), and EBITDA of about 0.212 billion US dollars. “Admittedly, the stock feels like two steps forward and one step back, and execution continues despite the stock price falling more than 25% from its high point. The survey found that product changes are driving better engagement, and we love the new CAPI/AWS features.”

Piper predicts $Meta Platforms (META.US)$ Second-quarter revenue was around 40 billion dollars (up 16% year over year), and EBITDA was about 20 billion dollars. “Our check is once again positive, as Advantage+Reels' performance is improving and Instagram is still good for e-commerce. The first quarter of 2025 had the toughest year-on-year data, but Meta has led 23% growth in the third quarter.”

Regarding Reddit, the company said it thought it was worth buying the stock due to strong user growth, continuous improvement in ad manager data, and the lowest incremental profit expectations in 2025-2026 compared to peers.

Regarding Snap, Piper said the results of the inspection were “mixed” despite Snapchat+'s company data showing an acceleration in the third quarter.

in$eBay (EBAY.US)$Above, Piper pointed out that despite its 48% year-to-date increase, its valuation is still convincing, about 10 times NTM EBITDA. “As GMV growth in the second half of the year is more likely, we still think it's worth buying this stock. Furthermore, GMV and non-physical retail growth in the US have been improving since the first quarter of 2022, and Wall Street expectations now mean a slowdown.”

Editor/Jeffy