10 Undervalued Companies with Network Effects

These are the companies with network effects that are trading at attractive prices based on a cursory estimate of their fair value, and are also not already in my portfolio. With a brief description of their network effects.

And the two that look the most interesting right now.

*Current price is the closing price as of August 13, 2025

Airbnb (ABNB)

• Current Price = $124.55

• Fair Value = $130

• Network Effects

  • Two-sided Marketplace: More hosts attract more guests; more guests demand attracts more hosts, improving liquidity and search matching.

Amazon (AMZN)

• Current Price = $224.54

• Fair Value = $245

• Network Effects

  • Marketplace

    • Two-sided Marketplace: Buyers ↔ sellers flywheel. Greater selection lowers search cost and increases conversion, drawing more sellers.

    • Data Effects: Clickstream, conversion, and logistics data improve recommendations, ads targeting, and fulfillment.

  • AWS

    • Platform: Developers and third-party vendors build on AWS; more services & tools attract more builders, which attracts more partners/content.

  • Advertising

    • Two-sided Marketplace: Advertisers ↔ shoppers. More shopper intent data increases ad ROAS, attracting more advertisers, which improves ad relevance.

Booking Holdings (BKNG)

• Current Price = $5,447.92

• Fair Value = $5,700

• Network Effects

  • Two-sided Marketplace: Travelers ↔ accommodations. Dense supply improves availability & price discovery, boosting traveler traffic and property sign-ups.