2023 has been a good year on the whole for the internet sector, but 2024 will still be “a stock picker’s play,” according to Morgan Stanley. “The internet sector has somewhat fairly carried a reputation for being a poorly performing sector in recent years. The one-liner often associated with our names points to higher interest rates and a softening macro lurking over the sector,” the investment bank’s analysts, led by Luke Holbrook, wrote in a Dec. 20 note. The U.S. Federal Reserve has indicated three rate cuts in 2024. “The possibility of falling interest rates next year plays a significant part in what has been a decent year – aided by a Santa rally, but we think it is too simplistic to skim over the opportunities presented across the space in what remains a stock picking environment,” the analysts wrote. ‘Opportune time’ for sub-sectors Against this backdrop, Morgan Stanley said, it’s “opportune time” for investors to reengage in sub-sectors like food delivery — a “poisoned chalice” in recent years — and classifieds. Food delivery names on the investment bank’s radar include Germany’s Delivery Hero and Britain’s Deliveroo . “Our food delivery names are currently trading at [around] 50% discount to 1 year average EV/EBITDA multiples,” the analysts said. The EV/EBITDA ratio compares a company’s enterprise value with its earnings before interest, taxes, depreciation and amortization. As for classifieds, the investment bank has its eye on the likes of Swiss online property platform Hemnet and Norway-based Adevinta . Elsewhere, it sees opportunities in e-commerce despite “structural challenges in areas such as online apparel or online grocery delivery, given higher competition and uncertain consumer behavioral patterns.” It also expects interest rate cuts to be a tailwind for the sub-sector. “Defensive names” it likes include Poland’s Allegro. — CNBC’s Michael Bloom contributed to this report.