What is the Digital Markets Act (DMA)?

The Digital Markets Act is a European Union regulation designed to ensure fair competition in digital markets. It targets large tech companies (called "gatekeepers") like Google, forcing them to change how they display search results and give competing services more visibility. For investors, this creates opportunities in companies that may benefit from these changes, particularly in travel and local search businesses that were previously overshadowed by Google's own services.

How could these regulatory changes benefit online travel companies?

Online travel agencies and hotel booking sites could see significant benefits as Google is required to display their services more prominently in search results. Instead of Google prioritizing its own travel booking features, companies like Booking.com, Expedia, and TripAdvisor may receive more visibility, leading to increased traffic, more bookings, and potentially higher revenues. This more level playing field could help these companies recapture market share they may have lost to Google's dominant position.

What are "vertical search" companies?

Vertical search companies specialize in specific categories or industries, rather than providing general web search results. For example, while Google offers broad search capabilities, companies like Yelp focus specifically on local business reviews, and Booking.com specializes in travel accommodations. These vertical search businesses offer deeper, more specialized information in their particular niche. The stocks in this group are primarily vertical search companies in the travel, hospitality, and local business sectors.

What does "event-driven investment opportunity" mean?

An event-driven investment opportunity is one that arises from a specific catalyst or event, rather than long-term market trends. In this case, the European Union's Digital Markets Act represents the "event" that could potentially benefit certain stocks. Investors who identify these opportunities early can position themselves to gain from market shifts before they're fully reflected in stock prices. These opportunities often have a shorter timeframe than traditional investment strategies.

What is "Analyst Rating" and why does it matter?

Analyst Ratings are professional recommendations from financial analysts who study companies and their stocks. They typically range from "Strong Buy" to "Strong Sell" with variations between. These ratings matter because they represent expert opinions on a stock's potential performance based on detailed research into the company's finances, market position, and growth prospects. While not guarantees, they provide helpful insights from professionals who closely follow specific industries and companies.

15 handpicked stocks

Europe's Open Search Market

This carefully selected group of stocks represents companies positioned to benefit from Google's changing search results in Europe. Our analysts have identified online travel, hotel, and local search businesses that could see increased visibility and traffic due to the EU's Digital Markets Act.

Han Tan | Market Analyst

Updated 2 days ago | Published at juillet 3