Tech stocks may look attractive on valuation, but Evercore ISI's Mark Mahaney expects a cautious near-term outlook as macro pressures weigh on spending.
Attractive Valuations In High-Quality Tech Names
Mahaney told CNBC on Wednesday that some major tech stocks, particularly Amazon.com Inc
The analyst described them as "dislocated high-quality, dislocated" companies and included them among his top picks.
He believes these stocks offer opportunity as narratives shift, pointing to improving sentiment around Amazon's AI capabilities.
Mahaney argued that Amazon could see a similar re-rating to Alphabet Inc's
Q2 Outlook Weighed Down By Ad Budget Cuts
The analyst warned that second-quarter performance could come in muted as companies begin trimming advertising budgets.
He said these cuts are already showing up in channel checks and are likely to impact platforms that rely on brand and performance advertising.
Mahaney emphasized this reflects cautious corporate spending rather than any structural issue in digital advertising.
While the pullback may be temporary, he expects companies to signal weaker near-term outlooks for the June quarter.
AI Growth Intact Despite Investment Cycle
Despite near-term concerns, Mahaney remains optimistic about long-term growth driven by AI.
He noted that tech companies are currently in a heavy investment phase, with rising spending levels, but expects this to normalize over time.
The analyst believes this cycle will ultimately deliver strong returns, with companies regaining high profitability over the next few years.
While he acknowledged uncertainty around timing, he said the AI-driven growth opportunity remains intact regardless of short-term economic conditions.
Price Actions: Meta Platforms shares were up 0.68% at $681.50, Alphabet shares were up 0.95% at $339.20, and Amazon.com shares were up 1.94% at $254.55 at publication on Friday, according to Benzinga Pro data.
