Morgan Stanley: North American Internet Stocks Are Attractive, Valuations Diverge Among Leading Companies

According to TechFlow, a Morgan Stanley research report dated October 13, 2026 shows that for the week ended October 9, U.S. internet stocks rose by approximately 2% on a market-cap weighted basis. The sector's forward 12-month EV/EBITDA stands at approximately 12.6x, representing a discount of roughly 7% and 16% against the five-year and ten-year averages, respectively. Morgan Stanley rates the North American internet sector as "attractive," although valuations among top companies remain inconsistent. Amazon and Meta trade at approximately 13% and 10% below their respective two-year averages, while Alphabet trades at a premium of about 4%. The report further estimates that treating stock-based compensation as cash expenses leads to median increases in expected 2026 EV/EBITDA of approximately 26% for e-commerce companies and 38% for digital media companies, indicating that equity compensation costs significantly influence valuation outcomes.