[Morgan Stanley Says Internet Sector Valuation Discounted, AI Capital Expenditure ROI Debate Unresolved] Morgan Stanley's August 18 Internet Weekly Report noted that the internet sector fell 1% last week, with Amazon and Google dropping 4% and 2%, respectively. The valuations of Amazon, Google, and Meta are discounted by 7% to 14% compared to their five-year averages. The overall internet sector's NTM EV/EBITDA is discounted by 7% compared to the five-year average, but NTM EV/Sales carries a 19% premium. If stock-based compensation is treated as a cash expense, the median EV/EBITDA for the digital media, e-commerce, and travel sectors would increase by approximately 36%, 30%, and 44%, respectively. Morgan Stanley believes that the debate over AI ROIC is the core focus of the market. With current low valuations, a consensus on buying has yet to form, and the internet sector is likely to remain range-bound.