Here are the top internet stock picks for 2022 as selected by Evercore ISI

Published Wed, Dec 29 20212:11 PM EST

The Nasdaq Composite is on track to lag the S & P 500 this year for the first time since 2016 . But Evercore ISI's internet stock analyst Mark Mahaney believes a number of names look attractive heading into 2022, although investors need to be selective. "With interest rates rising and global economies hopefully opening in '22, we take a more muted/cautious stance on our relatively high-growth, high-multiple sector going into the New Year," he said in a Dec. 27 note to clients. "Given our belief that successful product development creates new market opportunities, strengthens value propositions and boosts revenue growth, we focus on what we see as the key products/services that these companies need to focus on in '22 to maximize shareholder value," he added. Within mega-cap names, or companies with a market cap over $100 billion, Mahaney's picks include Amazon and Uber . He said that the infrastructure investments Amazon's made over the last two years should "begin to pay dividends" in 2022. The e-commerce giant also has one of the largest and least penetrated total addressable markets given its exposure to retail, cloud, advertising, business supplies and pharmacy. Overall, Mahaney said Amazon is "one of the highest quality stocks in 'net land." When it comes to Uber, Evercore said mobility revenue acceleration is probable in 2022 as economies reopen. "Uber boasts leading positions in nearly every international ridesharing market they operate in," the firm said, adding that Uber has the "largest global online food delivery platform outside of China." One of the stocks Mahaney favors among large-cap names, or companies with a market cap between $20 billion and $100 billion, is Roku . He said that while supply chain pressures will likely persist during the first half of 2022, these headwinds are already reflected in the stock. Shares of the company are down 30% for 2021. The firm added that Roku's product leadership gives it a "sustainable competitive advantage." Within this basket of stocks Evercore also favors Chewy and Spotify . Across companies with a sub-$20 billion market cap, Mahaney said Bumble and Duolingo are among the names that look most attractive. Bumble went public in February and shares are down significantly since. Still, Evercore said the company is a "leading player in the sizeable online dating market with secular tailwinds as online penetration grows and cultural norms evolve globally." Mahaney pegs the company's total addressable market to be roughly $10 billion. Duolingo went public in July, and in a similar move to Bumble, shares have declined since. But Evercore said the company has strong fundamentals with monthly active user and daily active user acceleration, and the firm sees revenue accelerating in the fourth quarter and into 2022. The company's position as a market leader should also support future growth.

A Roku Inc. remote in an arranged photograph in Hastings-on-Hudson, New York, May 2, 2021.

Tiffany Hagler-Grear | Bloomberg | Getty Images

"With interest rates rising and global economies hopefully opening in '22, we take a more muted/cautious stance on our relatively high-growth, high-multiple sector going into the New Year," he said in a Dec. 27 note to clients.