By Jacob Sonenshine

One area of the market that still has plenty of room to recover from declines related to two major concerns is internet stocks. Evercore analysts identified several names.

The Invesco Nasdaq Internet Exchange-Traded Fund is down 17% from its record high hit at the end of 2025. Much of the slide came early this year, when the market began to fear that Anthropic, OpenAI, and even smaller artificial intelligence innovators would displace the need for all kinds of services -- including internet-based consumer services.

The Iran conflict had a mild impact, given the spike in oil prices, which raises the possibility of lower consumer demand. The latter is a relatively minor concern, given the possibility that the conflict could cool, the fact that February inflation remained fairly subdued, and the fact that oil is well below its recent peak. In addition, the Federal Reserve has already lowered interest rates, and if it keeps them steady, that could eventually support consumer spending.

Now, "the internet sector is experiencing significant [price] dislocation," writes Evercore's Mark Mahaney.

He highlighted several such stocks, including Meta Platforms, Chewy, DoorDash, Booking Holdings, Uber Technologies, Spotify, and Shopify.

He also likes Amazon.com (AMZN), which is down 16% from its record in November. It now trades at about 26 times analysts' expected earnings for the coming twelve months, down from about 33 times at the stock's peak. That's a fairly slim premium to the S&P 500's just-over 21 times, but when the stock is in favor and the market is more worry-free, it can trade at more than a 10-point premium.

The point is that it looks attractive in the face of strong fundamentals, Mahaney writes, a thesis with which we agree. While e-commerce and advertising growth have slowed over the years, analyst consensus estimates still call for growth in the low-double-digit percentages annually for the coming five years, according to FactSet. That's important, given that those segments still represent just over two-thirds of the roughly $805 billion that analysts expect this year.

Amazon Web Services, the company's cloud-based data servicing business, is expected to grow about 21% annually for the next five years. That growth could certainly materialize if what Oracle management said on its Tuesday evening earnings call proves correct. It outlined how it's using cutting-edge AI internally to enhance its products, making it less vulnerable to disruption from Anthropic's Claude tool. That logic could certainly apply to Amazon.

If it does, cloud sales would grow, and the higher profit margins that come with them will help boost overall margins and earnings. Such profit growth would soothe concerns about the company's recent aggressive capital investments and borrowings, as it would eventually make those costs look smaller and less risky.

"We still believe the Amazon long thesis is well intact and that AWS results are proving out return on AI," Mahaney writes.

Take a chance on the internet.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

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March 11, 2026 15:39 ET (19:39 GMT)

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