End of the run?

By Jeff John Roberts
July 18, 2017

The so-called FANG stocks—short for Facebook, Amazon, Netflix and Google—are an investors’ delight. The FANGs share price keeps soaring, they dominate their respective markets, and the companies face few competitive threats.

But the future is less rosy for one member of the FANG club, according to Mark Mahaney, a longtime Internet company analyst with RBC Capital Markets who shared his thoughts at Fortune’s Brainstorm Tech conference in Aspen on Monday.

“The biggest competitive risk for all these is government,” said Mahaney, but nonetheless singled out Google as facing a special peril from regulators.

Mahaney pointed to the search giant’s recent antitrust headaches in Europe, which include a whopping $2.7 billion penalty over its shopping search results, and separate investigations into Android and its ad policies. Overall, however, Mahaney remains buoyant on all the FANG stocks, claiming “fundamental trends” are there for them to continue rising.

The optimism was echoed by Brett Thill, another veteran analyst with Jefferies Technology Group.

Thill told the room he is particularly bullish on Amazon, claiming the retail giant’s cloud computing service, AWS, is poised to grow at “software multiples” while the rest of the company’s business will also keep expanding. The analysts also expressed enthusiasm for possible-IPO candidates Pinterest and Airbnb.

But while their overall view on Internet companies is bullish, not all tech stocks won the approval of Thill and Mahaney.

Pressed by Fortune moderator Erin Griffith to name a stock to avoid, both named Twitter. Mahaney lambasted the social media company for its “dramatic management turmoil and lack of innovation” and suggested a recent boost in its share price is only due to M&A rumors.

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