Internet stocks have been on fire during the last year, but the sector may be bracing for a pullback.
Morgan Stanley downgraded the Internet sector to "in-line" from "attractive" on Monday, citing high valuations.
Internet companies'—including Google, Amazon and Facebook—valuations are too high relative to their long-term growth prospects, Morgan Stanley analysts said.
As part of the call, Morgan Stanley also removed Google from its Best Ideas list, maintaining its overweight rating.
Notable tech investor Marc Andreessen, who is a Facebook director and notable venture capitalist, may sense such a pull back as well.
Andreessen's venture capital firm, Andreessen Horowitz, sold 2.28 million Facebook shares earlier this month. However, the firm still holds 4.57 million Facebook shares.
(Read more: Facebook director Andreessen's firm sells a third of its shares)
—By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.