Citi cuts internet stock targets amid tariffs and softer macro

Investing.com -- Citi has trimmed target prices (TPs) and earnings projections for several U.S. internet stocks amid the negative effects of recently imposed tariffs, more limited macro visibility, and a weakening outlook for online advertising.

While Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN) remain the firm’s top picks, the Wall Street firm sees downside risks mounting across the broader online ecosystem.

The new round of tariff hikes—145% on Chinese goods and 10% on others—along with fading consumer sentiment, has led Citi to lower its 2025 and 2026 revenue and EBITDA forecasts for companies including Alphabet (NASDAQ:GOOGL), Reddit Inc (NYSE:RDDT), Pinterest (NYSE:PINS), and Snap Inc (NYSE:SNAP).

“Lower consumer confidence likely translates directly into reduced demand and ad budgets, and we note even prior to ‘Liberation Day’ our checks were highlighting macro challenges,” said Ronald Josey, senior internet analyst at Citi.

Josey cut the price target on Meta shares to $655 from $780, but the analyst maintained the Buy rating, pointing to the company's strong engagement trends and product innovation.

Meta’s performance-based ad model is “typically among the last platforms (and among the first to recover) to experience a slowdown in ad spend,” Josey noted, adding that newer products like Meta GEM and Business AI are boosting conversion rates.

Amazon’s target was reduced to $225 from $273, reflecting the company’s direct exposure to tariffs and macro uncertainty. However, Citi sees some offset from a continued mix-shift toward essentials and resilient demand for AWS.

“The 145% tariffs on Chinese imports may have a greater impact on Amazon’s sales and profitability,” the note states, though the bank expects efficiency gains from regionalization and automation efforts to provide margin support.

Snap also bore a steep cut, with its target slashed to $9 from $13.50. Josey flagged brand advertising exposure and slowing engagement in North America as key risks.

Pinterest and Reddit also saw double-digit reductions to their price targets to $38 and $150, respectively, reflecting lower ad revenue forecasts and ongoing economic headwinds.

“Our lower multiple reflects advertising headwinds and reduced visibility, though partially offset by improving engagement rates, tailwinds from key product improvements, and expanding margins on greater overall efficiency,” Josey said on PINS.

Citi’s price objective on Alphabet stock of $195 remained unchanged, though the bank lowered its 2025 and 2026 revenue forecasts for Google and Alphabet by 3.5% and 5%, citing reduced visibility across Search and YouTube due to a worsening macroeconomic backdrop.