The second-quarter report cards for FAANG stocks are in — and it's a mixed bag once more. But Goldman Sachs is keeping its buy calls for the grouping and has just one sell call among the tech giants. Google parent Alphabet and Facebook parent Meta both missed on earnings and revenue estimates, while Amazon delivered a revenue beat. Netflix beat Wall Street's expectations on earnings and lost fewer subscribers than anticipated during the same quarter. The streaming giant had warned investors last quarter that it expected to shed around 2 million subscribers, but lost only around 970,000 during the three-month period ending June 30. Apple was the only FAANG stock that beat on earnings and revenue. "In many ways this earnings season was split across two broad narratives," Goldman's analysts, led by Eric Sheridan, said on Aug. 21. "Digital advertising players struck a more cautionary tone on growth as an output of macroeconomic activity, industry competition, industry headwinds from privacy changes & a slightly weaker brand advertising environment, while companies with more direct exposure to the consumer struck a more optimistic tone that they had not yet seen any demonstrative change in end demand behavior," he added. Against this backdrop, Goldman sees the "most compelling" risk-reward ratio among large-cap names with significant presence in end markets and an ability to improve margins in various economic conditions. Why Netflix is a sell While Sheridan acknowledged that Netflix had a "better than feared" loss in paid subscribers in the second quarter and guided for new additions in the third quarter, he said the market might be looking beyond that metric when evaluating the stock. "We continue to believe that Netflix will be measured on its ability to meet the industry's rising competitive intensity and to execute against two major strategic initiatives — cracking down on password sharing and launching an advertising supported subscriber tier," he said. Sheridan said Netflix's guidance and initial details around such initiatives show the potential for new subscriber growth and higher margin revenue dollars. Read more Energy stocks are on a roll. But this one has the balance sheet to beat them all, says Citi Why tech investor Gene Munster thinks Apple has an upside of more than 40% JPMorgan says the growth stocks rally has further to go — and explains when it will likely end "Looking long term, it will be any successful execution on those initiatives that would likely cause Netflix to reverse its recent past of stock price underperformance. Unfortunately, our visibility into timing, level of success and how those initiatives will build momentum remains low," he added. Shares in Netflix closed at around $230 on Wednesday, representing a potential downside of 23.7% to Goldman's price target of $186 on the stock. Top pick Amazon is Goldman's top pick in the internet sector this year, according to Sheridan. The bank said the company's second-quarter earnings report indicates a "potential recovery path" for growth or margins in its core e-commerce business and sustained operating momentum in its cloud computing arm Amazon Web Services, as well as in digital advertising.