Top analyst Michael Graham of Canaccord eyes three leading internet giants, giving his long-term bullish vote to Facebook and Amazon in his enthusiastic quarterly earnings preview- yet, stalling in his tracks when it comes to Twitter’s prospects down the line. Whereas Facebook has growth opportunities still rife for the taking, especially with assets like Instagram, Messenger, and Video, and Amazon is unstoppable in its positive investor sentiment, Twitter is staring down a fierce storm of competitors in the mix.

Michael Graham has a very good TipRanks score with a 63% success rate and a high ranking of #124 out of 4,608 analysts. Graham earns 14.1% in his yearly returns. When recommending FB, Graham yields 29.2% in average profits on the stock. When suggesting AMZN, Graham realizes 34.2%. However, when rating TWTR, Graham forfeits 33.3%.

Let’s take a closer look:

Facebook’s Untapped Ad Revenue Potential Is Key

Coming off a strong last quarter, Facebook Inc (NASDAQ:FB) is set to announce second-quarter results after the closing bell tomorrow evening. Graham believes that the multi-faceted nature of Facebook will allow it to continue to reach new heights in revenue growth, especially in ad inventory. Graham highlights the need for the company to continue to invest in R&D in response to new technologies that could block ads and adversely affect revenue.

The analyst sees innovation, pricing expansion, and adjacent platform monetization as key factors in sustaining growth throughout 2017. It is for this reason that Graham only estimates that ad revenue growth will drop to 44.2% year over year, while consensus predicts a sharper decline at 44.5%, down from 51% in the first quarter of 2017.  The analyst opined that “Slowing revenue growth has been well telegraphed by the company so numbers closer to consensus are unlikely to cause too negative of a reaction in the stock.”

On the other hand, Graham points to “pockets of growth that remain relatively untapped” and notes that “Management’s ad load calculation does not factor in some newer ad formats like Instagram Stories so this could relieve some pressure on news feed ad load. Additionally, messenger recently opened up more ad inventory and the mix shift to more video ads should help pricing growth.”

The analyst is optimistic writing, “Facebook’s multifaceted growth story is still intact with mid-teens user growth, consistently expanding engagement, and steady pricing expansion […] additionally adjacent platforms like Instagram, Messenger, and WhatsApp are all early in monetization. Instagram, the furthest along, is effectively competing for more time spent (especially with newer, millennial-oriented apps like Snapchat).”

As such, Graham reiterates a Buy rating on FB with a $175 price target, representing a near 7% rise from current levels. (To view Graham’s track record, click here.)

TipRanks analytics reveal FB as a Strong Buy. Out of 35 analysts polled by TipRanks in the last 3 months, 32 are bullish on Facebook stock and 2 are neutral on the stock. With an upside of near 5%, the stock’s consensus target price stands at $172.77. 

Amazon Growth to Remain High for the Foreseeable Future

Amazon.com, Inc. (NASDAQ:AMZN) shares soared today to record high of $1,043 after coming off a slippery first quarter. As the e-commerce giant prepares to deliver a second quarter print on Thursday, Graham is quite confident- even though the first quarter of the year was the first in the last several that the company did not see a rise in its domestic eCommerce margin. Graham only views last quarter’s set back as a minor bump in the road and expects “growth to remain high for the foreseeable future.” Moreover, the analyst recognizes the ongoing losses in India, but remains unconcerned even if “Amazon will lose money on the Prime bundle in India for a while to come.”

On the domestic front, Graham opines that “Domestic eCommerce, driven by the Prime bundle, seems to be still early in its evolution, even as the company begins to gain traction in previously difficult categories like apparel and grocery.” However, Graham remains “gratified that the stock reacted favorably due to the very strong top-line growth trends.” Furthermore, Graham shows “this domestic margin expansion is an important point of validation for investors who are willing to underwrite long investment cycles in other parts of the company so long as the proof point of domestic expansion is there.”

On the international scene, the company is having issues with Prime India, which is priced at $9.99 a year or just 0.08% of what users in the US pay. The analyst stresses that “investors are looking for some indication that the peak investment is somewhere in sight” and that they “may be hoping for some indication of revenue scale and that the net investments can start to get smaller.” Graham keeps in mind that Amazon is the type of stock with a lot of “’uber-convicted’ longs” and it will take a few quarters with one or more than one or two data points to “dislocate sentiment.”

As such, Graham reiterates a Buy rating on AMZN with a $1,200 price target representing a near 16% rise from current levels.

TipRanks analytics reveal AMZN as a Strong Buy. Out of 28 analysts polled by TipRanks in the last 3 months, 26 are bullish on Amazon stock and 2  are neutral on the stock. With an upside of near 10%, the stock’s consensus target price stands at $1,140.17.

Twitter Stuck with Revenue Headwinds and Lack of Innovation

Over the past several months Twitter Inc (NYSE:TWTR) has made a bit of a comeback with shares rising 34% since the start of April. As the company gets set to release quarterly earnings on Thursday many analysts are asking just how long this rally will last. Graham asks how lower video ad pricing and decommissioning some performance ad units will affect revenue. The analyst points to the fact that Twitter has slowly evolved and has a relatively difficult interface when compared to other social platforms like Facebook, Instagram and Snapchat. Graham questions if the late spike will actually be an impediment to the company.

The analyst is especially leery of revenue headwinds, which can cause pitfalls, explaining, “We are still cautious about revenue headwinds for the rest of the year stemming from budget pull back and discontinued ad products. Those discontinued ad products are most meaningful in H2, so the revenue shortfall could become worse.” Pointing to implied revenue guidance, Graham recaps that “In Q1, when implied revenue guidance was for a 17% decline, the company posted a significant beat that still showed revenue falling 8%,” stressing that the second quarter could see a similar story.

In terms of both active daily and monthly average users, the analyst is less than optimistic, stating that “Advertiser budgets are following audience and time spent, both of which Twitter has ceded to competitors Facebook, Instagram, YouTube, and Snapchat.” Graham estimates the company netted 5 million monthly viewers and saw a 14% rise in daily users, but “suspect competitors have higher rates of engagement still.” The analyst opines the company would have to do “something considerably impressive” to break out of its two-year single digit slump.

As such, Graham reiterates a Hold rating on TWTR with a $15 price target representing a near 25% decline from current levels.

TipRanks analytics reveal TWTR as a Hold. Out of 28 analysts polled by TipRanks in the last 3 months, 3 are bullish on Twitter stock, 16 remain sidelined, and 9 are bearish on the stock. With a downside of 21%, the stock’s consensus target price stands at $15.74.