Investors usually do not waste any time reminding everyone of the dot-com bubble whenever the market takes a turn for the worse. With a recession imminent, some sectors have already corrected by so much that they are in bear market territory. Internet stocks belong to the same group.
Analysts at Evercore believe most of the internet stocks have very limited exposure to tariffs but still get hammered every time the market crashes on tariff developments. This means these stocks now present a favorable risk-to-reward ratio for investors.
We therefore decided to dig into the details of each of these internet stocks. To come up with our list of the 10 least risky internet stocks, we used the list compiled by Evercore’s analysts and ranked them by risk, with the least risky stock taking the number one spot.
10. Alphabet Inc. (NASDAQ:GOOG)
Alphabet Inc. operates in Google Cloud, Google Services, and Other Bets segments. It offers AI infrastructure, data and analytics, Chrome, Google Drive, Google Photos, internet services, and other products and services. The stock has suffered so far this year, falling over 17%.
The tech giant was in the spotlight after it announced a deal with the U.S. government last week. As per the agreement, the company will temporarily cut the prices of its Workspace software by 71% for every federal agency. The Workspace software includes Contacts, Meet, Gmail, Chat, and Calendar. The deal aims to lower government expenses and provide improved technology at reduced costs. It is effective till September 30.
As for the future, the company’s promising project, Waymo, is a major growth driver. This is GOOG’s autonomous taxi project, which is already operating in some big U.S. cities. The biggest advantage of this project is Tesla’s absence in this market, as Elon Musk’s firm uses a completely different technology for its self-driving. The firm plans to expand its services to Miami, Atlanta, and Washington. In addition to this, Waymo is paving the way for international expansion, starting with Tokyo.
9. Amazon.com, Inc. (NASDAQ:AMZN)
Amazon.com, Inc. operates in the retail sale of consumer products, subscriptions, and advertising services through physical stores and online. It operates in Amazon Web Services (AWS), North America, and International segments. The company also engages in the manufacturing and sale of electronic devices as well as in the production and development of media content.
The e-commerce giant recently introduced a new “Buy for Me” feature in its shopping app. This feature enables users to shop items from third-party websites without leaving the app. It is currently available to a limited group of users in the United States. Oliver Messenger, shopping director at Amazon, gave the details of this new feature:
“This new feature uses agentic AI to help customers seamlessly purchase from other brands within the familiar Amazon Shopping app, while also giving brands increased exposure and seamless conversion.”
The firm is expected to release its Q1 2025 earnings on April 28. Based on the guidance, the anticipated revenue growth for the quarter is about 7% YoY. Operating margin is projected to be around 10.4%. This represents a slowdown from the most recent quarter. However, analysts’ estimates are slightly higher than the guidance. They project revenue growth of 8.16% YoY along with the EPS growth of 38% YoY. Higher analyst estimates could result in volatility in the stock once the earnings come out later this month.
8. eBay Inc. (NASDAQ:EBAY)
eBay Inc. is an operator of marketplace platforms. The company’s platform connects sellers and buyers by enabling them to sell, buy, and list different products. Its marketplace platform consists of its off-platform businesses, the eBay suite of mobile apps, and the online marketplace at eBay.com.
eBay has just announced a new partnership with Checkout.com, a digital payments platform. The move is aimed at making payments easier for the company’s international customers. eBay’s Vice President of global payments and financial services had this to say on the occasion:
“The addition of Checkout.com to our partnership ecosystem highlights our continued commitment toward accelerating customer and business growth through uniquely eBay payments and financial services.”
eBay has also shifted its focus to selling pre-owned items, a move that protects it from giants like Alibaba and Amazon, which primarily sell new products. This also means the company doesn’t enjoy the same valuation as these leaders, but eBay is profitable and operates at scale, something that most of its competitors cannot boast about. As long as investors are willing to understand that the company is successfully carving out its own niche, they should not have any problem betting on its success.
7. Grab Holdings Limited (NASDAQ:GRAB)
Grab Holdings Limited is a superapps provider in Indonesia, Singapore, Vietnam, Malaysia, the Philippines, Thailand, Cambodia, and Myanmar. The company operates in Mobility, Deliveries, Financial Services, and Other segments. It also offers banking and digital services.
At the start of this year, the company signed an electric vehicle supply partnership with BYD Company Limited. This collaboration will provide the firm driver and fleet partners throughout Southeast Asia. It will also provide Grab drivers access to up to 50,000 BYD Company’s electric vehicles at discounted rates. With this partnership, the ride-hailing giant will get an extended warranty on the EV batteries.
Executive Chuck Kim of Grab Holdings highlighted the potential benefits of this partnership by saying:
“This collaboration enables us to drive the transition to EVs forward by lowering the financial barriers that are often associated with EVs, and in the long run, deliver economic benefits to our driver-partners, which may include fuel cost savings.”
Recently, the firm received a license to operate as a street-hail taxi service in Singapore. With this move, Grab became the sixth taxi operator in the country. Morgan Stanley views this development as beneficial and has an Overweight rating on the stock. Morgan Stanley analyst Divya Gangahar Kothiyal is also optimistic on the company’s ability to deliver:
“We expect Grab to be able to ramp up its taxi fleet to the minimum requirement of 800 over the next 1–2 years.”
6. Lyft, Inc. (NASDAQ:LYFT)
Lyft, Inc. is a ride-sharing company that operates a peer-to-peer marketplace for on-demand ridesharing. The company’s platform offers a ridesharing marketplace that links riders with drivers. It also provides Express Drive, which is a car rental program for drivers.
Through recent partnerships with key industry players, the firm plans to launch autonomous vehicles on its platform this summer. Despite drivers’ concerns related to the earnings potential, Lyft’s EVP of Driver Experience, Jeremy Bird, highlights that ride-sharing is a growing market. He believes that incorporating autonomous vehicles (AVs) will increase demand, enhance the ride experience, and benefit drivers.
The stock has been facing some challenges so far this year as it has declined by over 15%. Despite the recent decline in share price, it presents an attractive upside of 102% if one considers analyst price targets. Based on 47 analyst ratings, the company has a highest target price of $22, which means it could potentially more than double from the current levels. The recent decline in share price presents an attractive buying opportunity to benefit from the potential upside in the future.
5. Meta Platforms, Inc. (NASDAQ:META)
Meta Platforms, Inc. is the developer of products that help people to share and connect with their family and friends. It enables them to connect through personal computers, augmented reality, wearables, mobile devices, and virtual reality and mixed reality headsets. The company operates in Reality Labs (RL) and Family of Apps (FoA) segments.
Guggenheim reiterated its Buy rating on the stock last week, citing strong user engagement on its platforms as a major strength for the company. Regardless of macroeconomic uncertainty, the firm remains a preferred choice for advertisers. The research firm expects Meta to benefit from growth in reels and increased efficiency through its Advantage+ platform. Although the firm cut its target price to $675, it still sees a potential upside of 30.8%.
A few days ago, the company announced the expansion of its artificial intelligence models. As per the announcement, Meta will use public content from European Union users to train its AI models. EU users of WhatsApp, Facebook, and Instagram will be notified about the data collection.
“We’re following the example set by others, including Google and OpenAI, both of which have already used data from European users to train their AI models. We’re proud that our approach is more transparent than many of our industry counterparts.”
With regulation becoming an increasing risk for these tech companies, it is interesting to see META getting proactive and complying from the beginning rather than waiting for regulatory authorities to crack down later.
4. DoorDash, Inc. (NASDAQ:DASH)
DoorDash, Inc. is a commerce platform operator that connects consumers, merchants, and independent contractors. It operates Wolt Marketplace and DoorDash Marketplace. The company’s marketplaces offer different services, including order fulfillment, customer support, payment processing, customer acquisition, merchandising, and demand generation.
The firm announced an expansion of its existing partnership with Coco Robotics, a food delivery robotics company. With this collaboration, DASH will start offering sidewalk robot delivery in a limited U.S. cities.
Senior Director of DoorDash Labs, Harrison Shih, mentioned:
“We believe the future of delivery will be multi-modal, and we’re thrilled to partner with Coco to expand sidewalk robot deliveries that complement the Dasher network as we continue to enhance the DoorDash experience for customers and merchants.”
A few days ago, the company also entered into another national collaboration with Giant Tiger Stores. Under this partnership, Giant Tiger Stores has launched on-demand delivery because it plans to speed up the product delivery process. This service will be available across Ontario, Quebec, Manitoba, Nova Scotia, Alberta, Prince Edward Island, New Brunswick, and Saskatchewan. As a result of this deal, the stock price surged 1.28%.
DoorDash also entered into a partnership with Domino’s Pizza at the start of this month. With the help of this collaboration, Domino’s will expand its presence in the food delivery industry. It will allow customers to use DASH’s marketplace app to order Domino’s pizza. All these collaborations show that the company is actively looking for growth through business expansions.
3. Uber Technologies, Inc. (NYSE:UBER)
Uber Technologies, Inc. is an operator and developer of proprietary technology applications. The company operates in the Delivery, Freight, and Mobility segments.
The firm announced an expansion of its grocery delivery service last month through a partnership with a leading online fresh food grocer, FreshDirect. It will provide Uber customers access to prepared meals, high-quality fresh groceries, and pantry staples through the Uber Eats platform. This collaboration brings together FreshDirect’s focus on freshness and quality along with Uber’s reliable delivery network.
At the start of this month, UBER entered into an agreement with Dubai’s Road and Transport Authority to introduce autonomous vehicles in Dubai. Under this partnership, Uber will work with the city’s road transport authority on pilot programs, utilizing its technology to connect riders with AVs.
Moreover, the company plans to launch commercial robotaxi services in Atlanta under its collaboration with Waymo. As part of this partnership, the firm will handle charging, vehicle maintenance, and access management through its app. Despite concerns regarding Tesla’s entry into the Robotaxis market, Uber stands out with its solid operations.
2. Spotify Technology S.A. (NYSE:SPOT)
Spotify Technology S.A. is an audio streaming subscription service provider. The company operates in the Ad-Supported and Premium segments. It also provides contract research and development, distribution and marketing, sales, and customer and other support services.
SPOT has recently entered into a new multi-year agreement with the Warner Music Group. The agreement covers music publishing and recorded music to strengthen their partnership for online music offerings. The new deal introduces a direct licensing model in several additional countries, including the U.S. It will also expand access to Warner Music and video catalog.
At the start of this month, the firm also partnered with Magnite and Google to improve its advertising platform. The company introduced a new ad platform called “Spotify Ads Exchange” (SAX). This ad exchange platform enables advertisers to buy ads in a way that fits them best. To capture the greater share of the ad market, the company announced the launch of new artificial intelligence tools. Moreover, Spotify also introduced “Spotify Gen AI Ads,” which creates high-quality audio ads with the help of AI.
“We’re bringing our decades-long AI expertise and innovative approach to our advertising partners to enable them to create scripts and voice-overs at no additional cost, making it easier than ever to create high-quality, scalable audio ads.”
1. Netflix, Inc. (NASDAQ:NFLX)
Netflix, Inc. is an entertainment services provider. It provides games, television (TV) series, feature films, and documentaries in different languages and genres. The company enables members to receive streaming content through digital video players, mobile devices, TVs, and TV set-top boxes.
The firm is expected to announce its Q1 earnings later today. Based on 35 different analysts’ estimates, Netflix is anticipated to grow its revenue by 12.14% year-over-year. Analysts also project EPS growth of 8.80% for the quarter. With the combined contribution of popular returning franchises and original hits, the company’s subscriber engagement remained strong during the quarter.
The firm’s NFL games were a success as the games received 65 million viewers in the U.S. At the start of this month, Amazon announced joining NFLX in airing NFL games on Christmas. The league has not yet announced the schedule for the 2025 season, as it is likely to be released in May. However, sports streaming in the US is becoming a powerful commodity for streaming giants and Netflix is positioning itself well to be a major stakeholder in this area.
According to a recent Bloomberg report, the streaming media giant has now started testing new search technology. The OpenAI-powered search engine allows users to search for shows based on specific terms, including the customer’s mood. The new search engine is currently available in New Zealand and Australia on iOS devices. However, it is anticipated to launch in several markets soon, including the United States.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
Hedge Fund Resource Center