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Amazon and Google parent Alphabet are among Goldman Sachs’ top picks in the internet segment to rebound in the second half of the year. Both stocks have seen weak starts in the first half of 2025. Shares of Alphabet are down nearly 9% through Tuesday, while Amazon is down about 6%. The S & P 500 was higher by almost 1% in 2025. Both stocks have struggled as the broader market has been struck by volatility caused by President Donald Trump’s trade war, concerns over a potential U.S. slowdown and burgeoning interest expense on the national debt. Looking ahead, Goldman analyst Eric Sheridan expects artificial intelligence to be a catalyst for internet stocks in his coverage universe, seeing the technology as a continuous driver for growth as applications expand. GOOGL AMZN YTD mountain Google-parent Alphabet and Amazon have both underperformed the S & P 500 in 2025. “[W]e believe that AI will continue to permeate more products and use cases for consumers, but see those shifts playing out over time and do not expect AI to drive wholesale displacement/disintermediation of existing computing habits,” Sheridan wrote in a research report last week. “We continue to look at 2025 as a year where stakes are rising for platforms to prove out the adoption/utility/use cases of their investments in AI as we are now in year three of an elevated OpEx/CapEx cycle ( & investors increasingly ask for proof points on the eventual return on investment).” Sheridan said both Google and Amazon are key names that may be poised for upside appreciation once they move past short-term investor concern. Regulatory concerns tied to the Justice Department’s investigation into Alphabet over allegations of monopolistic practices have overshadowed the company’s strong search segment revenue and robust profit margins. Goldman’s $220 price target on Alphabet implies roughly 27% upside from Tuesday’s $172.90 close. On Amazon , the analyst said concern over the effect of tariffs on the company’s e-commerce platform could similarly be concealing potential growth opportunities in both AI and the cloud segment. Sheridan also highlighted Amazon’s streaming business and negotiated sports rights deals on Prime as additional growth drivers in the future. The company drew the ire of President Donald Trump last month after Amazon reportedly planned to display the cost associated with tariffs next to the total price of products. “[D]ebates persist on the impact of higher tariffs but where we believe that a) price/negotiation levers can help mitigate the cost impact of tariffs, b) that AMZN remains well positioned to gain market share, and c) remains levered to several attractive longer-term secular growth themes (incl. AI, Cloud computing, retail media, streaming, sports),” Sheridan said. Goldman’s $220 price target on Amazon would equal 7% upside from Tuesday’s $206.02 close. Sheridan also mentioned other large-cap tech stocks that Goldman rates a buy within his research coverage: Meta Platforms , Spotify and ride-sharing company Uber .
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