New Delhi, Jan. 13 -- India's internet stocks went through a consolidation in the year that passed by - 2025, and investors now await signs of an earnings downgrade cycle to complete before turning more constructive on those stocks/sector, according to Morgan Stanley Research.

The report stated that the sector faced slower funding, earnings pressure, and a clear shift in investor sentiment.

The report described 2025 as a year of consolidation for India's internet stocks.

Startup funding declined compared to the previous year. Total funding in 2025 stood at USD 7.6 billion, marking a 9 per cent year-on-year fall, the Morgan Stanley report noted.

While the first half of the year showed some recovery, the momentum weakened later. The rep...