A new strain of coronavirus, the Omicron variant, has been detected in more than a dozen countries across at least five continents and global markets have been trending lower amid increasing concerns.
Investors tend to rotate into the highest quality big tech stocks amid uncertainty, according to Evercore ISI analyst Mark Mahaney.
“Facebook and Amazon remain two of my top picks,” Mahaney said Wednesday on CNBC’s “Squawk Box.”
Mahaney cited the appealing valuations of Meta Platforms Inc. and Amazon.com Inc.
“I just think the valuation is relatively compelling on both of those names and I think they both have good fundamental stories going into 2022,” he said.
Mahaney noted both stocks have been “somewhat dislocated” in 2021, which creates an opportunity to buy. Facebook is up about 19 percent year-to-date, while Amazon is only up about 8 percent so far in 2021.
“They’ve been among the highest quality internet stocks for five years. I think they will be for the next five years,” Mahaney said. “On these kind of corrections, you buy.”
Mahaney has an Outperform rating and a $370 price target on Facebook and an Outperform rating and $4,200 price target on Amazon.
