Top Analyst Very Bullish on Large-Cap Internet Stocks as Digital Ad Growth Explodes

It was only a matter of time before traditional advertising platforms were pushed aside for digital media placed on the internet. How many of the coveted 18 to 34 demographic watch broadcast TV, listen to the radio or read a newspaper? The number is very low, and dwindling every year. The digital advertising era was upon us, and over the past 20 years has continued to grow exponentially every year.

A new report from Brent Thill, the outstanding internet analyst at Jefferies, makes the case that digital ad growth for the first quarter was very solid. Of course, the big winners were the mega-cap and large-cap internet leaders that dominate the space. Thill does hint at valuation caution and noted this in the report:

Our digital ad checks indicate likely first-quarter revenue beats across our coverage, but much of this could be embedded in the recent year-to-date stock performance. We expect a big beat for our top growth idea, but with the stock trading at 16 times fiscal year 2022 revenue expectations are still elevated.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.


The search giant continues to expand, and it was the G in the FANG stocks before changing its name in 2015. Alphabet Inc. (NASDAQ: GOOGL) is a global technology company focused on key areas such as search, advertising, operating systems and platforms, and enterprise and hardware products. The company generates revenue primarily by delivering online advertising and by selling apps and content on Google Play, as well as hardware products. Alphabet provides its products and services in more than 100 languages and in 190 countries, regions and territories.

Alphabet offers performance and brand advertising services. It operates through Google and Other Bets segments. The Google segment includes principal internet products, such as search, ads, commerce, Maps, YouTube, Apps, Cloud, Android, Chrome and Google Play, as well as technical infrastructure and newer efforts, such as virtual reality.

Analysts point to Google Cloud, which is the largest cloud infrastructure play and engages in more technology, infrastructure research and development in headcount and dollars than any other company does. That gives it the strength and wherewithal to compete with and differentiate itself from Amazon’s AWS and Microsoft’s Azure.

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