Core Insights - The head of internet research at Evercore ISI, Mark Mahaney, discusses the current state of consumer internet stocks, noting a major rerating and a dramatic rally over the past three years [2] - Mahaney identifies Meta as a strong compounder with a reasonable valuation, while Amazon is highlighted as a potential dislocated stock despite recent outages [3][4] Group 1: Market Trends - The consumer internet sector has experienced significant growth, with notable entry points earlier in the year for companies like Uber and Google [2] - There is a scarcity of dislocated high-quality stocks in the internet and tech space currently, with few trading significantly below their recent highs [7] Group 2: Company Performance - Amazon Web Services (AWS) has faced outages, which could impact its competitive position against rivals like Google Cloud and Azure, although Mahaney believes the recent outage will not have a long-term effect [8][10] - Major tech companies, including Microsoft, Amazon, Google, and Meta, have seen improvements in revenue and operating income per employee, attributed to aggressive headcount management and AI deployment [10] Group 3: Valuation Insights - Mahaney emphasizes the importance of fundamentals, focusing on revenue and operating income per employee, which he refers to as return on AI spend [9][10] - Valuations for companies like Google and Meta are considered reasonable, trading at a modest premium to the market, contrasting with the high PE multiples seen during the dot-com bubble [11][12]