Jefferies: 3 top internet stocks for 2022 with as much as 40% upside
Tech stocks are having a slow start in 2022. But Jefferies remains optimistic, especially when it comes to companies in the fast-growing internet sector.
The Wall Street firm’s internet picks fell 5% in 2021 — particularly disappointing performance considering that both the S&P 500 and the Nasdaq gained more than 20% for the year.
Jefferies says that the difference in performance could be a “great opportunity” for internet stocks to make a comeback in 2022.
So here’s a look at three web stocks that Jefferies has given a “buy” rating to. Based on the firm’s latest price targets, all three offer double-digit upside potential.
Meta Platforms (FB)
Facebook’s name change to Meta Platforms in October is one of the big reasons why everyone seems to be talking about the metaverse these days. But its bread-and-butter business — social media — is still firing on all cylinders.
In Q3 of 2021, Facebook’s monthly active users grew 6% year over year to 2.91 billion. Factoring in Meta’s other platforms — namely Instagram, Messenger and WhatsApp — the number of active users on at least one product totaled 3.58 billion.
Jefferies has a buy rating on Meta and a price target of $420, implying potential upside of about 26%.
Meta is “one of the best fundamental stories in online advertising, producing consistent best-in-class ROI for marketers” writes Jefferies.
Jefferies likes what Meta is doing in the virtual reality space, too.
“Oculus rose to the No. 1 most downloaded app in the App Store on Christmas Day, providing a clear indication that VR adoption is more mainstream than previously thought,” says the investment bank.
Shares of Meta are up 35% over the past year.
Alphabet (GOOGL)
As the parent company of Google, Alphabet is already an internet behemoth commanding a marketing cap of over $1.8 trillion. But Jefferies believes it can get even bigger.
The investment bank has a buy rating on the company and a price target of $3,500. With Alphabet shares currently trading at around $2,790,…
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