TechFlow News, July 2, according to TechFlow Research, Morgan Stanley released an Internet tracking report, noting that Google and Meta's nominal EV/EBITDA appear inexpensive (GOOGL 16.1x, META 8.9x), but after adjusting for stock-based compensation accounting treatment, the actual multiples rose from 16.3x to 31.1x (+91%), still lower than the five-year average of 31.6x, implying that the real valuation of internet giants is undervalued by the market by more than 30%.
In the short term, AI capital is waiting on the sidelines, with digital advertising companies' 2026 EPS growth expectations being negative. In the long run, once AI advertising product ROI is clearly validated, valuation center reshaping will occur quickly.
The recent decline in the Internet index is a technical correction, with YTD still up 14.2%. Catalysts include AI advertising ROI validation, changes in interest rate expectations, and valuation center repricing.
