Four-star Evercore (EVR) analyst Mark Mahaney is warning that big tech companies could face a weaker second quarter, mainly due to cuts in advertising spending. Based on his recent checks, he said that companies are starting to reduce their ad budgets as economic uncertainty increases. As a result, businesses that depend heavily on advertising, especially brand advertising and performance marketing, may feel pressure. Even so, Mahaney still sees opportunity in certain names, particularly Amazon (AMZN) and Meta Platforms (META).
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Trade AMZN with leverageHe described them as high-quality companies that are currently trading at relatively low valuations, which makes them attractive despite near-term challenges. In his view, when strong businesses become undervalued, sentiment can shift quickly. Therefore, he believes these stocks could rebound as the narrative improves, especially if investors start to focus more on their long-term potential rather than short-term weakness.
Looking ahead, Mahaney remains positive on the role of AI in driving future growth for these companies. He even suggested that Amazon could become the “Google (GOOGL) of 2026,” thanks to growing confidence in its AI capabilities, including its internal chip development. At the same time, he admitted that tech companies are currently spending more heavily on infrastructure, which has made them more capital-intensive. However, he sees this as part of a normal investment cycle rather than a permanent shift, expecting spending to slow over time.
Which Tech Stock Is the Better Buy?
Turning to Wall Street, out of the two stocks mentioned above, analysts think that META stock has more room to run than AMZN. In fact, META’s price target of $855.46 per share implies almost 27% upside versus AMZN’s 14.8%.
