Mizuho Picks Top Internet Stocks, But Google And Netflix Don't Make The Cut

A new report by Mizuho analyst Neil Doshi takes a look at the investment opportunities that remain in Internet stocks now that the Internet has reached the ripe old age of 20. “The pace of technology evolution over the past 20 years seems far more substantial than the prior 30 years and we believe that the next 10 years will be just as, or even more, critical for many Internet companies,” Doshi writes.

R.A.M.P.-ing up
Mizuho has a “tacky” acronym that it uses to describe the keys to the next decade for Internet stocks: R.A.M.P.
Revenue- New Internet revenue sources could be worth billions of dollars.
Audiences- Growing network and audience size will be critical.
Margin- Margin expansion and market share will be the two fundamental steps in the path to profitability.
Platform- Top companies will be able to successfully expand into new platforms.

Internet top picks
Mizuho lists the following three stocks as its top Internet picks:
Facebook Inc FB-Buy, $104 target
Amazon.com Inc AMZN-Buy, $498 target
Yahoo! Inc YHOO-Buy, $51 target

Mizuho sees a number of “under-monetized opportunities” at Facebook, such as Instagram. Analysts believe that Amazon’s retail business and AWS can be profitable and that margins can expand. Finally, at its current share price, Mizuho believes that Yahoo’s core business is currently assigned zero value by the market.

Conspicuously absent
The report specifically mentions Google Inc GOOGGOOG as a name that many might consider a surprise snub, but analysts are worried about increasing competition coming from Amazon, Facebook and others. Mizuho currently has a Neutral rating on big-name Internet stocks Google, Netflix Inc NFLX and eBay Inc EBAY.