My top stock pick could spike 30% higher after Trump tech wreck, influential analyst says

Tech stocks miss out on Trump bump

The steep drop in technology stocks since Donald Trump's election provides a "compelling entry point" for many battered large-cap names, leading internet analyst Mark Mahaney told CNBC on Friday.

"I find Netflix extremely interesting going into '17 for a variety of reasons. So it's our top pick," RBC's Mahaney said on "Squawk Box," putting a $150 per share price target on the stock over the next 12 months, which would be a 30 percent increase from Thursday's close of $115 per share.

Trump was declared the winner over Hillary Clinton on Nov. 9, putting pressure ever since on big tech names, on the notion if the billionaire's campaign criticisms of net neutrality, Amazon CEO Jeff Bezos and immigration policies were to become policy, they could hold back innovation in the industry.

Since the close on Election Day, Netflix has dropped about 7.5 percent, the worst performer over the period among the so-called FANG stocks — Facebook, Amazon, Netflix and Google parent Alphabet. Ahead of Friday's trading, the broader market has risen about 2.2 percent since the close on Nov. 8.

Mahaney said he does not see "material changes" to net neutrality rules, which were designed to make sure all internet was treated equally, with no selective blocking or paid fast lanes for some content. Opponents feel the rules — approved by the FCC last year and based on a public-utility model — stifle innovation and hurt companies like Netflix.

Even if the net neutrality rules were dramatically overhauled, Mahaney believes Netflix would weather the storm because infrastructure costs for bandwidth and storage plummeted over the last decade.

"Most of [the] money they're spending goes on content and marketing. The infrastructure costs, the bandwidth costs, it's like 3 or 4 percent of their total cost structure. So it's pretty small," he said. "It probably wouldn't materially impact the Netflix P&L [profit and loss statement] or the Google or the Facebook P&Ls."

Mahaney isn't alone in seeing opportunity in tech. On Thursday, Piper Jaffray tech analyst Gene Munster wrote in a note to clients: "We would be buying the [Trump] fear priced into internet mega-caps." Piper Jaffray, like RBC, does not think Trump will roll back net neutrality.

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