Internet stocks’ fourth-quarter 2020 results are likely to reflect gains from massive demand for cloud computing services, courtesy of work-from-home, online learning and remote health diagnostic trends.

High demand for SaaS-based (or Software as a Service) applications pertaining to employee collaboration, video conferencing, cybersecurity, infrastructure monitoring, asset performance management and human capital management solutions, and telehealth care might have driven the industry participants’ performance in the fourth quarter.

Additionally, stay-at-home wave has increased demand to access social-media platforms, online gaming, music and video streaming services. This upside might get reflected in the Internet companies' impending quarterly results.

Markedly, Facebook’s fourth-quarter 2020 results were driven by steady user growth across all regions.

Also, recovering ad revenues, driven by optimism as economies start to reopen, stimulus push, and improving demand scenario, is likely to have contributed to the fourth-quarter performance. Growing influence of digital marketing has triggered spending on ads, which may have positively impacted Internet companies’ performance in the quarter to be reported.

For instance, Alphabet’s (GOOGL Quick QuoteGOOGL - Free Report) fourth-quarter 2020 top line benefited from higher advertiser spend in Search and YouTube, and persistent strength in Google Cloud and Play. Total Google advertising revenues grew 21.8% year over year to $46.2 billion. Moreover, Facebook’s fourth-quarter advertising revenues increased 31.1% year over year (21% at cc) to $27.19 billion.

Moreover, the practice of social distancing in a bid to contain the contagious virus has been bolstering the usage of Internet-of-Things (IoT) based services, robotics, e-commerce, contactless payment and online delivery solutions worldwide.

The uptick in digital payments trend is quite evident from PayPal’s (PYPL Quick QuotePYPL - Free Report) stellar fourth-quarter results, wherein earnings and revenues surpassed the estimates and improved year over year. The robust performance highlighted an uptrend in net new active accounts, and strong performance by Venmo and merchant services.

Further, Amazon delivered stellar fourth-quarter 2020 results, reflecting gains from e-commerce boom and robust performance during the holiday season.

However, companies catering to online travel, tourism and hospitality domains are likely to reflect the impact of coronavirus crisis-induced travel restrictions. Reintroduction of shelter-in-place guidelines on apprehensions regarding the new mutant strain of coronavirus might have weighed on top-line performance of Internet-based services companies.

Sneak Peak of Few Upcoming Q4 Releases

Given the mixed backdrop, investors interested in the Internet companies keenly await fourth-quarter 2020 earnings results from notable companies slated to report on Feb 9.

Our quantitative model predicts an earnings beat for the company with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) as this combination increases its chances of beating estimates.

Twitter’s fourth-quarter 2020 results are likely to reflect gains from recovery in ad revenues as small businesses have resumed controlled ad spending in order to engage a larger audience around the return of events, and increased and previously delayed product launches.

Also, the company’s initiatives to add features and focus on tackling abuse issues are expected to have helped it in expanding the monetized user base in the to-be-reported quarter.

Our proven model predicts an earnings beat for Twitter this time around. Twitter has an Earnings ESP of +3.12% and a Zacks Rank #3.

The Zacks Consensus Estimate for earnings has remained steady at 30 cents per share over the past 30 days, indicating growth of 20% from the year-ago quarter. (Read More: Twitter to Report Q4 Earnings: What's in the Cards?)

Akamai Technologies’ (AKAM Quick QuoteAKAM - Free Report) fourth-quarter 2020 performance is likely to have benefited from strong internet traffic and higher demand for its cloud security solutions amid rising instances of security breaches.

Our proven model predicts an earnings beat for Akamai this time around. The company has an Earnings ESP of +2.35% and a Zacks Rank #3.

The consensus mark for earnings has remained steady at $1.32 over the past 30 days, which reflects year-over-year growth of 7.3%. (Read More: Akamai to Report Q4 Earnings: What's in the Offing?)

Ceridian HCM Holding Inc. fourth-quarter 2020 results are likely to reflect gains from high demand for its cloud-based human capital management (HCM) solutions, courtesy of coronavirus crisis induced accelerated digital transformation of enterprises taking place across all industries.

Solid uptick in Dayforce cloud HCM platform and Powerpay, a cloud HR and payroll solution, is expected to have contributed to the company’s fourth-quarter performance.

The Zacks Consensus Estimate for earnings has remained steady in the past 30 days at 8 cents, flat on a year-over-year basis.

Ceridian HCM Holding Inc. Price and EPS Surprise

Although Ceridian carries a Zacks Rank #3, an Earnings ESP of 0.00% makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lyft, Inc. (LYFT Quick QuoteLYFT - Free Report) fourth-quarter 2020 performance is likely to have been impacted by softness in ride volumes owing to reintroduction of coronavirus-led restrictions in some of the cities. (Read More: Lyft November Rides Drop 50% Amid Coronavirus Case Spike)

Lyft has an Earnings ESP of 9.35% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Nevertheless, sequential improvement in ride volumes as millennials avoid public transport options and growing traction of its “transportation as a service” model might have aided top-line performance.

The Zacks Consensus Estimate for bottom line is pegged at a loss of 71 cents, unchanged in the past 30 days.

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