Mark Mahaney

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75 appearances 1 recordings 1 series first heard May 2025 last heard May 2025

Mark Mahaney’s voice in public audio — every appearance, attributed to the second.

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Prof G Markets · What to Buy When the Tech Sector is On Sale — ft. Mark Mahaney · 1 May 2025 podcast

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Well, both of them fall into what I call DHQ camp. So dislocated high quality camp or whatever. They're great DHQ opportunities. So I look for the highest quality assets in the space. And that would have to include Amazon, Meta, probably Google. I'll go a little further out on that. On the risk limb, I'd probably include Dash, Uber, Booking, Shopify, Spotify, Netflix.

There's about 10 of these that I think are really high quality. And then the question is, when do they get dislocated? Look, we began this year with multiples that were relatively high. I thought there was only really one DHQ at the beginning of the year, that was Uber.

But given the market sell-off, you've got a chance here to buy some of the highest quality assets that kind of, they're not fire sale prices, but they're on sale. And Amazon is one of those. It's trading at one of its lowest PE multiples ever, 23, 24 times earnings. And I know that there's a lot of near-term issues and we'll talk through those.

They face the same ones a lot of other companies face. They just have a very good execution track record. So my guess is that they'll handle them better than others. And my same pitch would go with Meta, which is the stock with the trade-off is trading at one of the, it's not as bad as it was in 2022, but it's one of the more attractive multiple shots you've had.

in I'd say the last two years, then I think the fundamental story is very much intact. So that's why Amazon and Meta would be two of my top picks.

I think last week, the CEOs of Home Depot, Walmart, and Target went into the White House to expressed their concerns over what the tariffs would mean for their businesses. I'm actually a little surprised that Amazon wasn't in that list. They're actually bigger than all three of them in terms of retail volume, or they're similar in size to Walmart. But I think they may be modestly bigger.

But whatever. If you're a major retailer, yeah, you walk around the Walmart store, turn over anything in there. It's all made in China, pretty much. And so it's an issue for all of these major retailers. So yeah, that's kind of an issue across the board. And these companies are going to have to make a decision. Are they going to eat price? Are they going to eat market share?

You know, you got to do something because your input prices are going up. So how are you going to handle that? Are you going to defend margins? Are you going to defend market share? And so there's an economic issue here for Amazon. And then there's the follow-on impact, which is that if you have, you know, pretty material price increases coming through the system,

uh, that is gonna dent consumer demand, uh, and, um, And so there's kind of a long-term economic issue or maybe even a medium or near-term economic issue for Amazon. And then other things, you know, there's very intense competition in the cloud business for Amazon and maybe some regulatory challenges too. So I throw it all together. I don't think Amazon was going to, there was no act.

I don't think Amazon was going to show tariff prices next to their regular prices. That's what they said. But I also just think Amazon's management team has been Pretty darn apolitical, I would argue, over the last 10, 20 years. And this is a place that's extremely hardworking environment.

And the executives that I've tracked over the many years, I mean, they've been almost entirely profit focused. So I've seen very little political activity really coming out of them for good or for bad. It's just, that's what I've sensed. So I doubt that there was really going to be some broad-based showing of what the tariff impact on prices was going to be. But it is real. It is a material impact.

So if there's a drawdown in advertising spend, Meta will be impacted. I just think it's going to be one of the last least impacted of the major ad platforms. I may be wrong on this, but

look it's largely performance marketing it's also got highly fungible inventory so the obvious comparison is with google if you're um you know people are searching for hawaiian golf package vacations uh that's a very specific uh search item and there's a very specific type of ad you can put against that if you're in your facebook news feed instagram news feed uh real stories whatever um

That inventory that they could add inventory they can put against you is very fungible, depending on what your personal interests are. But it's very fungible. And so I just think that they're more resilient in an ad slowdown. None of them are recession proof, but they're more resilient. And I think meta would be one of the last places to get cut.

And frankly, of our channel checks so far have shown that. Advertiser demand has kind of held up for Meta. I'd be surprised if it hadn't given what Google just reported last week. So I just think Meta sort of holds up a little bit better in this environment. Valuation is pretty reasonable.

And it looks like they're starting to finally kind of cut down the investment spend at the reality labs based on reports. If that's true, that's great. I don't think any of these companies are going to slow down their AI capex spend.

But I think if they start cutting off some of these extraneous areas where they've been spending a lot, and Reality Labs is one that hasn't really shown much return yet, I think the market would respond positively to that.

I think they've used AI to dramatically improve the user experience. You know, your newsfeed has got a lot more, it's become more personalized, more interesting. I think that's true. And it shows up in more and more time spent on Facebook, Instagram and

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