It's earnings season, and large-cap tech companies will begin reporting their finances in the coming weeks. Mark Mahaney of RBC Capital Marktes gave CNBC his preview of how some of these companies will fare in the second half of this year. (Tweet This)
"The sentiment on Internet sector has recovered [from the beginning of the year]. I don't think it's gotten overboard," he said in an interview with CNBC's "Squawk Alley" on Friday. "I don't think we have a bubble in the public tech sector and the public Internet sector."
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He added that if tech stocks rise, it will be due to higher earnings and not just multiples.
Mahaney's second favorite stock pick is Facebook, after his No. 1 Amazon. "Facebook is really in a sweet spot now, they've figured out mobile and social, and you're getting this really large influx of TV ad budgets migrating over to the Internet. We think estimates go up and the stock goes up," he said.
As far as aggressive spending on the part of Facebook, Mahaney said that a company of this size should be investing heavily now to monetize assets like Instagram and Whatsapp. "By all means, invest heavily now; you don't want to ramp up margins and then have to figure out investments later," he said.
"Twitter, we think, is a really long turnaround process, I hope it works but we're not recommending the stock and hope is not a good reason to do that. They need to improve both products for users and products for advertisers," Mahaney said.
Netflix
Mahaney agrees that Netflix is a "great fundamental story. But I don't think you want to be aggressively buying Netflix here."
"As the stock has almost doubled year to date, I think you want to cool down the ardor a little bit." He wants to see how the company does in international markets such as Japan and China first.
Disclosures: Neither Mark Mahaney nor RBC Capital Markets owns shares of Facebook, Amazon and Linkedin.