More than once, the technology and internet world has crashed and burned, and often for far different reasons. The massive dot-com blow-up in 2000 and 2001 was the net result of literally hundreds of companies trading at absurd multiples (if they even had a multiple) based on the premise of how many eyeballs they were capturing, and the Wall Street graveyard remains littered with many of them.
On March 10, 2000, the Nasdaq hit a then all-time high of 5,048. One month later, it had lost 34% of its value. By October 2002, it had lost 78% of its value. It would not reach its previous all-time high again until 2015. Companies like Pets.com, Webvan, GeoCities, TheGlobe.com, Ask Jeeves, Alta Vista, Dr. Koop.com and so many more crashed and burned, and took investors with them.
The implosion of technology in 2022 is far different, as some of the biggest losers this year were some of the biggest winners over the past 10 years. Many continue to print massive profits. A new Goldman Sachs report highlights 11 top stocks that match the company’s 10 tech trends for 2023. All are Buy rated and are top ideas for the coming year. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Alphabet
The Google parent and search giant remains a very compelling idea, especially at current trading levels. Alphabet Inc. (NASDAQ: GOOG) provides various products and platforms in North America, Europe, the Middle East, Latin America and elsewhere.
Its Google Services segment offers products and services, including ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play store, as well as Fitbit wearable devices, Google Nest home products, Pixel phones and other devices, and in the provision of YouTube non-advertising services.
The Google Cloud segment offers infrastructure, platform and other services; Google Workspace that includes cloud-based collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar and Meet; and other services for enterprise customers. The Other Bets segment sells health technology and internet services.
The Goldman Sachs price target for Alphabet stock is $135, which compares with a $132.15 consensus target. Thursday’s closing print of $91.20 was down over 4% on the day.
24/7 Wall St.Amazon
This company is very possibly the best value for investors, after taking a harsh beating this year. Amazon.com Inc. (NASDAQ: AMZN) engages in the retail sale of consumer products and subscriptions globally. It sells merchandise and content purchased for resale from third-party sellers through physical and online stores.
The company also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Rings and Echo and other devices. It provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store, and it develops and produces media content.
Amazon also offers programs that enable sellers to sell their products on its websites, as well as its stores, and its programs allow authors, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. Further, the company provides computing, storage, database, analytics, machine learning and other services, as well as fulfillment, advertising, publishing, and digital content subscriptions.
Its Amazon Prime membership program provides free shipping of various items, access to streaming movies and series, and other services.
Goldman Sachs has a $165 target price, while the consensus target for Amazon.com stock is $140.64. Shares closed 3.4% lower on Thursday at $88.45.
Bumble
Internet dating has become a huge industry, and this is one way to play it. Bumble Inc. (NASDAQ: BMBL) provides online dating and social networking platforms in North America, Europe and elsewhere. It owns and operates websites and applications that offer subscription and in-app purchases dating products.
Founded by CEO Whitney Wolfe Herd in 2014, Bumble was one of the first dating apps built with women at the center and connects people across dating (Bumble Date), friendship (Bumble BFF) and professional networking (Bumble Bizz). Badoo, which was founded in 2006, is one of the pioneers of web and mobile dating products. Fruitz, founded in 2017, encourages open and honest communication of dating intentions through playful fruit metaphors.
Goldman Sachs’s $30 target price is above the $25.44 consensus target. Bumble stock closed almost 3% lower on Thursday at $23.02.
Expedia
Internet travel services have grown in a huge way over the past 20 years, and this is an outstanding play. Expedia Group Inc. (NASDAQ: EXPE) operates as an online travel company in the United States and internationally.
Its brand portfolio includes the following:
- Brand Expedia, a full-service online travel brand with localized websites
- Hotels.com for marketing and distributing lodging accommodations
- Vrbo, an online marketplace for alternative accommodations
- Orbitz, Travelocity and CheapTickets travel websites
- Ebookers, an online EMEA travel agent for travelers an array of travel options
- Hotwire, which offers travel booking services
- CarRentals.com, an online car rental booking service
- Classic Vacations, a luxury travel specialist
- Expedia Cruise, a provider of advice for travelers booking cruises
- Expedia Partner Solutions, a business-to-business brand that provides travel and non-travel verticals, which includes corporate travel management, airlines, travel agents, online retailers and financial institutions
- Egencia, which provides corporate travel management services
- Trivago, a hotel metasearch website, which sends referrals to online travel companies and travel service providers from hotel metasearch websites
- Expedia Group Media solutions
Expedia stock has a $173 target price at Goldman Sachs. The consensus target is just $128.96, and Thursday’s close at $90.20 was down almost 3% on the day.
IAC
Internet content and information is growing each year, and this is a great way to invest in it. IAC Inc. (NASDAQ: IAC) operates as a media and internet company worldwide. It publishes original and engaging digital content in the form of articles, illustrations, videos and images across entertainment, food, home, beauty, travel, health, family, luxury and fashion areas, as well as magazines related to women and lifestyle.
It also operates a digital marketplace that connects home service professionals with consumers for repairing, remodeling, cleaning, landscaping, maintenance, and enhancement services under the Angi Ads, Angi Leads and Angi Services brands. The company operates websites that offer general search services and information, including Ask.com, a search site with a variety of fresh and contemporary content; Reference.com, which offers content across select vertical categories; Consumersearch.com, which offers content designed to simplify the product research process; and Shopping.net, a vertical shopping search site that contains a mix of search services and content targeted to various user or segment demographics, as well as offers direct-to-consumer downloadable desktop applications.
IAC also offers Care.com, an online destination for families to connect with caregivers for their children, aging parents, pets, and homes; develops and provides subscription mobile applications across the communication, language, weather, business, health and lifestyle verticals; a technology-driven staffing platform for flexible W-2 work under the Bluecrew name; a platform to connect health care professionals with job opportunities under the Vivian Health name; The Daily Beast, a website dedicated to news, commentary, culture and entertainment that publishes original reporting and opinion; and production and producer services for feature films for sale and distribution through theatrical releases and video-on-demand services.
Goldman Sachs has set an $83 price target, while the consensus target for IAC stock is $81.77. Thursday’s close at $45.88 over 4% lower for the day.
Lyft
Ride-sharing is another 21st-century invention that has become part of life, and this is a way to be involved. Lyft Inc. (NASDAQ: LYFT) operates multimodal transportation networks that offer riders personalized and on-demand access to various mobility options. It provides Ridesharing Marketplace, which connects drivers with riders; Express Drive, a flexible car rentals program for drivers; Lyft Rentals that provides vehicles for long-distance trips; and a network of shared bikes and scooters in various cities to address the needs of riders for short trips.
The company also integrates third-party public transit data into the Lyft app to offer riders various transportation options. In addition, it offers access to autonomous vehicles; centralized tools and enterprise transportation solutions, such as concierge transportation solutions for organizations; Lyft Pink subscription plans; Lyft Pass commuter programs; first-mile and last-mile services; and university safe rides programs.
The $20 Goldman Sachs target price is less than the $23.54 consensus figure. Lyft stock closed on Thursday at $11.35, down almost 5% for the day.
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Match
This is another internet dating site that is extremely popular. Match Group Inc. (NASDAQ: MTCH) through its portfolio companies, is a leading provider of digital technologies designed to help people make meaningful connections.
The company’s global portfolio of brands includes Tinder, Match, Hinge, Meetic, OkCupid, Pairs, PlentyOfFish, OurTime, Azar, Hakuna Live and more, each built to increase the users’ likelihood of connecting with others. Through Match Groups trusted brands, the company provides tailored services to meet the varying preferences of their users. The services are available in over 40 languages to our users all over the world.
Goldman Sachs has a $70 target price, and the consensus target is $63.90. Match stock dropped almost 6% on Thursday to close at $41.95.
Meta Platforms
The Facebook parent has been crushed but still remains a social media destination for millions daily. Meta Platforms Inc. (NASDAQ: META) develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, wearables and in-home devices worldwide.
Its Family of Apps segment’s products include Facebook, which enables people to share, discover and connect with interests; Instagram, a community for sharing photos, videos and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, groups and businesses across platforms and devices through chat, audio and video calls and rooms; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately.
The Reality Labs segment provides augmented and virtual reality related products, comprising virtual reality hardware, software and content that help people feel connected, anytime and anywhere. The company was formerly known as Facebook and changed its name in October 2021.
The Meta Platforms stock price target at Goldman Sachs is set at $165. The $153.53 consensus target is closer to Thursday’s closing price of $116.15, a drop of almost 5% on the day.
This is one of the lesser known names that also has huge potential. Pinterest Inc. (NYSE: PINS) operates as a visual discovery engine in the United States and internationally.
The company’s engine allows people to find inspiration for their lives, including recipes, style and home inspiration, DIY, and others, and it provides video, product and idea pins. It shows visual machine-learning recommendations based on pinners’ tastes and interests.
Recently, the company got a boost when a Wall Street competitor upgraded the stock after the company reported that the advertising outlook going forward into the new year was very positive. The stock exploded during the pandemic but has come back to earth and is offering a timely entry point.
The Goldman Sachs target price is $31. Pinterest stock has a consensus target of $27.72. The $25.16 close on Thursday was down over 4% for the day.
Take-Two Interactive
Video gaming remains huge, and this is one of the best ideas around. Take-Two Interactive Software Inc. (NASDAQ: TTWO) develops, publishes and markets interactive entertainment solutions for consumers worldwide. The company offers its products under the Rockstar Games, 2K, Private Division and T2 Mobile Games banners.
Take-Two develops and publishes action/adventure products under the Grand Theft Auto, Max Payne, Midnight Club and Red Dead Redemption names, and it offers episodes and content, as well as develops brands in other genres, including the LA Noire, Bully and Manhunt franchises. The company also publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports and family/casual entertainment under the BioShock, Mafia, Sid Meier’s Civilization, XCOM series and Borderlands.
In addition, it publishes sports simulation titles, comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; and PGA TOUR 2K. Further, the company offers Kerbal Space Program, OlliOlli World and The Outer Worlds and Ancestors: The Humankind Odyssey under Private Division; and free-to-play mobile games, such as Dragon City, Monster Legends, Two Dots and Top Eleven.
Its products are designed for console gaming systems, including PlayStation 4 and PlayStation 5; Xbox One; the Nintendo’s Switch; personal computers; and mobile, comprising smartphones and tablets. The company provides its products through physical retail, digital download, online platforms and cloud streaming services.
Goldman Sachs has a $150 target price on Take-Two Interactive Software stock. The consensus target is $133.57, and shares closed down 3% on Thursday at $101.66.
24/7 Wall St.Uber
This is the ride-sharing leader and has expanded to food delivery, and it is the top pick at Goldman Sachs. Uber Technologies Inc. (NYSE: UBER) develops and operates proprietary technology applications in North America, Latin America, Europe, the Asia Pacific and elsewhere.
The company connects consumers with independent providers of ride services for ridesharing services, and it connects riders and other consumers with restaurants, grocers and other stores with delivery service providers for meal preparation, grocery and other delivery services.
Uber’s Mobility segment provides products that connect consumers with mobility drivers who provide rides in a range of vehicles, such as cars, auto rickshaws, motorbikes, minibuses or taxis. It also offers financial partnerships, transit and vehicle solutions offerings.
The Delivery segment allows consumers to search for and discover local restaurants, order a meal and either pick up at the restaurant or have the meal delivered, and it offers grocery, alcohol and convenience store delivery, as well as select other goods.
The Freight segment connects carriers with shippers on the company’s platform and enables carriers upfront, transparent pricing and the ability to book a shipment, as well as transportation management and other logistics services offerings.
The $45 Goldman Sachs target price is less than the $46.08 consensus figure. Uber stock closed on Thursday at $26.24, which was down close to 5% on the day.
While this selection actually is 11 top stocks, as the Goldman Sachs team pairs the two internet dating stocks as one thematic idea, all these top companies have been bludgeoned in 2022. Though they all offer outstanding entry points, it is important to remember that rising interest rates are kryptonite to technology stocks, and interest rates are likely not going higher. So, it makes sense to buy partial positions here and see what the new year brings.
With that caveat in place, and a reminder of how long it took the Nasdaq to return to highs after the dot-com collapse, aggressive growth investors with a long-term time horizon could be poised to make some massive profits over the next few years on the beaten-down sector giants, as they eventually will trade higher once again.
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