Barclays Upgrades the Internet to “Positive”

Barclays Capital upgraded the Internet sector to “positive” from “neutral,” citing strengthening fundamentals despite near-term effects of the slowdown in the economy.

The brokerage said increased usage and dependence would leave the sector well-positioned when the macro-economic environment improved.

“We recognize that growth is slowing, but we believe the Internet still remains an area of secular growth,” said analyst Douglas Anmuth in a note to clients.

Anmuth added that he expects both e-commerce and online advertising to re-accelerate when the economy stabilized.

The brokerage listed Google, Amazon.com, Netflix and Blue Nile as its top picks in ranking order.

Barclays said despite less strong tailwinds of broadband penetration and search, it was optimistic on international growth, and growth in mobile, video, and more targeted advertising.