Morgan Stanley said in a Sept. 16, 2026 research note that internet stocks rose 1% last week, while both the S&P 500 and the Nasdaq fell 1% over the same period. Within the group, META gained 5%, while Alphabet and Amazon were roughly flat. The bank said Amazon, Alphabet, and META are trading at 2026 forward price-to-earnings multiples of 19x, 17x, and 20x, representing discounts of 34%, 35%, and 9% to their respective 12-month averages. Sector performance also diverged, with travel down 8.1% and digital advertising up 1.4%. Morgan Stanley said AI uncertainty has re-emerged across the sector. In its view, travel platforms face the highest risk of disruption from AI agents because booking flows are highly standardized, while digital advertising carries the lowest AI risk. The note added that META continues to improve its AI-driven recommendation and ad-targeting capabilities. Based on valuation discounts and earnings growth, the bank said large internet names remain supported, favored leaders in digital advertising, and stayed cautious on travel platforms.
According to Chaoxiang Research, Morgan Stanley said in a Sept. 16, 2026 research note that internet stocks rose 1% last week, while both the S&P 500 and the Nasdaq fell 1% over the same period.
Among major names, META gained 5%, while Alphabet and Amazon were roughly flat.
Valuations remain below 12-month averages
The note said Amazon, Alphabet, and META are trading at 2026 forward price-to-earnings multiples of 19x, 17x, and 20x. That puts them at discounts of 34%, 35%, and 9% to their respective 12-month averages.
At the sector level, travel fell 8.1%, while digital advertising rose 1.4%.
Bank flags renewed AI uncertainty
Morgan Stanley said AI uncertainty has resurfaced. In the bank's view, travel platforms face the highest risk of being displaced by AI agents because booking processes are standardized. Digital advertising faces the lowest AI risk, and META continues to improve its AI recommendation and ad-targeting capabilities.
Based on valuation discounts and earnings growth, Morgan Stanley said leading internet companies remain supported. The bank said investors should watch digital advertising leaders and stay cautious on travel platforms.
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