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Top 5 Internet-Centric Stocks for a Strong Portfolio in 2024
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The Internet Software and Services industry is gathering momentum owing to robust IT spending on solutions, which support hybrid operating environments. Linkedin expects the global market size for Internet of Thing to reach more than $1.215 billion by 2030. Statista estimates that public cloud application services/software as a service (SaaS) end-user spending worldwide will reach around $232.3 billion. Bloomberg forecasts that the global Metaverse revenue opportunity will approach $800 billion in 2024.
The level of technology adoption by businesses and the proliferation of connected consumer devices that might help people connect and do business online should also accelerate the industry’s growth. Outstanding penetration of mobile devices among users, makes sense for businesses to invest heavily in web-based infrastructure, applications, and security software.
Within the technology sector, the Zacks Defined Internet-Software Industry is currently placed in the top 14% of all industries with one-year return of 70.4%. The Internet software industry is benefiting from continued demand for a global digital transformation. Growth prospects are alluring primarily due to the rapid adoption of SaaS, which offers flexible and cost-effective delivery of applications.
SaaS attempts to deliver applications to any user, anywhere, anytime and on any device. It has been effective in addressing customer expectations of seamless communications across multiple channels, including voice, chat, email, web, social media and mobile.
The growing need to secure cloud platforms amid rampant incidences of cyber-attacks and hacking is driving demand for web-based cybersecurity software. As enterprises continue to move their on-premise workload to cloud environments, application and infrastructure monitoring is gaining importance. This is increasing demand for web-based performance management monitoring tools.
Moreover, the pay-as-you-go model helps Internet software providers scale their offerings per the needs of different users. The subscription-based business model ensures recurring revenues for the industry participants. At this stage, it will be prudent to invest in Internet software stocks with a favorable Zacks Rank to strengthen one’s portfolio.
Our Top Picks
We have narrowed our search to five Internet software stocks with strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past year.
Image Source: Zacks Investment Research
Meta Platforms Inc. (META - Free Report) is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. META is considered to have pioneered the concept of social networking.
However, as developed regions mature, Meta Platforms has taken measures to drive penetration in emerging markets of South East Asia, Latin America and Africa. Of all places, India deserves a-special mention in terms of user growth. The world’s second-largest populated country offers tremendous potential for META. With China off the radar, India can prove to be a terrific growth engine for Meta.
Zacks Rank #2 Meta Platforms has an expected revenue and earnings growth rate of 13.5% and 22.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days.
CrowdStrike Holdings Inc. (CRWD - Free Report) is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches and the increasing necessity for security and networking products amid the growing hybrid working trend. Continued digital transformation and cloud-migration strategies adopted by organizations are the key growth drivers.
CRWD’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users. Additionally, strategic acquisitions, like that of Humio and Preempt, are expected to drive growth for CRWD.
Zacks Rank #2 CrowdStrike has an expected revenue and earnings growth rate of 28.2% and 23.6%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days.
Pinterest Inc. (PINS - Free Report) is making solid progress in deepening user engagement on the platform. Focus on improving operational rigor and integration of cutting-edge AI models will likely boost relevancy and personalization. The corporate strategy to introduce more actionable content on the platform from a wide range of sources has resulted in healthy growth in engagement metrics across all regions.
PINS’ mobile deep linking product is helping retailers make more purchases through their mobile apps. PINS has significantly propelled shopping ads revenue growth. Advanced tools such as Travel Catalog and Premier Spotlight empower advertisers to reach target audiences with greater precision.
Zacks Rank #1 Pinterest has an expected revenue and earnings growth rate of 17.4% and 21.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last seven days.
monday.com Ltd. (MNDY - Free Report) develops software applications in the United States, Europe, the Middle East, Africa, and internationally. MNDY provides Work OS, a cloud-based visual work operating system that consists of modular building blocks used and assembled to create software applications and work management tools.
MNDY also offers product solutions for work management, sales CRM, software development verticals, business development, presale, and customer success services. MNDY serves organizations, educational or government institutions, and distinct business units of an organization.
Zacks Rank #1 monday.com has an expected revenue and earnings growth rate of 28.1% and 15.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 30 days.
Twilio Inc. (TWLO - Free Report) is benefiting from accelerated digital transformation amid a growing hybrid working trend. TWLO’s selective acquisitions and strategic investments in businesses and technologies are enhancing its product portfolio and fortifying its global presence.
TWLO is not only gaining traction from the solid expansion of its existing clientele but is also aided by first-time deals with new customers, supported by its firm focus on introducing products and the go-to-market sales strategy. We expect TWLO’s top line to witness a CAGR of about 7.9% from 2023-2025.
Zacks Rank #2 Twilio has an expected revenue and earnings growth rate of 6.3% and 9.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.4% over the last seven days.
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Top 5 Internet-Centric Stocks for a Strong Portfolio in 2024
The Internet Software and Services industry is gathering momentum owing to robust IT spending on solutions, which support hybrid operating environments. Linkedin expects the global market size for Internet of Thing to reach more than $1.215 billion by 2030. Statista estimates that public cloud application services/software as a service (SaaS) end-user spending worldwide will reach around $232.3 billion. Bloomberg forecasts that the global Metaverse revenue opportunity will approach $800 billion in 2024.
The level of technology adoption by businesses and the proliferation of connected consumer devices that might help people connect and do business online should also accelerate the industry’s growth. Outstanding penetration of mobile devices among users, makes sense for businesses to invest heavily in web-based infrastructure, applications, and security software.
Within the technology sector, the Zacks Defined Internet-Software Industry is currently placed in the top 14% of all industries with one-year return of 70.4%. The Internet software industry is benefiting from continued demand for a global digital transformation. Growth prospects are alluring primarily due to the rapid adoption of SaaS, which offers flexible and cost-effective delivery of applications.
SaaS attempts to deliver applications to any user, anywhere, anytime and on any device. It has been effective in addressing customer expectations of seamless communications across multiple channels, including voice, chat, email, web, social media and mobile.
The growing need to secure cloud platforms amid rampant incidences of cyber-attacks and hacking is driving demand for web-based cybersecurity software. As enterprises continue to move their on-premise workload to cloud environments, application and infrastructure monitoring is gaining importance. This is increasing demand for web-based performance management monitoring tools.
Moreover, the pay-as-you-go model helps Internet software providers scale their offerings per the needs of different users. The subscription-based business model ensures recurring revenues for the industry participants.
At this stage, it will be prudent to invest in Internet software stocks with a favorable Zacks Rank to strengthen one’s portfolio.
Our Top Picks
We have narrowed our search to five Internet software stocks with strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past year.
Image Source: Zacks Investment Research
Meta Platforms Inc. (META - Free Report) is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. META is considered to have pioneered the concept of social networking.
However, as developed regions mature, Meta Platforms has taken measures to drive penetration in emerging markets of South East Asia, Latin America and Africa. Of all places, India deserves a-special mention in terms of user growth. The world’s second-largest populated country offers tremendous potential for META. With China off the radar, India can prove to be a terrific growth engine for Meta.
Zacks Rank #2 Meta Platforms has an expected revenue and earnings growth rate of 13.5% and 22.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days.
CrowdStrike Holdings Inc. (CRWD - Free Report) is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches and the increasing necessity for security and networking products amid the growing hybrid working trend. Continued digital transformation and cloud-migration strategies adopted by organizations are the key growth drivers.
CRWD’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users. Additionally, strategic acquisitions, like that of Humio and Preempt, are expected to drive growth for CRWD.
Zacks Rank #2 CrowdStrike has an expected revenue and earnings growth rate of 28.2% and 23.6%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days.
Pinterest Inc. (PINS - Free Report) is making solid progress in deepening user engagement on the platform. Focus on improving operational rigor and integration of cutting-edge AI models will likely boost relevancy and personalization. The corporate strategy to introduce more actionable content on the platform from a wide range of sources has resulted in healthy growth in engagement metrics across all regions.
PINS’ mobile deep linking product is helping retailers make more purchases through their mobile apps. PINS has significantly propelled shopping ads revenue growth. Advanced tools such as Travel Catalog and Premier Spotlight empower advertisers to reach target audiences with greater precision.
Zacks Rank #1 Pinterest has an expected revenue and earnings growth rate of 17.4% and 21.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last seven days.
monday.com Ltd. (MNDY - Free Report) develops software applications in the United States, Europe, the Middle East, Africa, and internationally. MNDY provides Work OS, a cloud-based visual work operating system that consists of modular building blocks used and assembled to create software applications and work management tools.
MNDY also offers product solutions for work management, sales CRM, software development verticals, business development, presale, and customer success services. MNDY serves organizations, educational or government institutions, and distinct business units of an organization.
Zacks Rank #1 monday.com has an expected revenue and earnings growth rate of 28.1% and 15.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 30 days.
Twilio Inc. (TWLO - Free Report) is benefiting from accelerated digital transformation amid a growing hybrid working trend. TWLO’s selective acquisitions and strategic investments in businesses and technologies are enhancing its product portfolio and fortifying its global presence.
TWLO is not only gaining traction from the solid expansion of its existing clientele but is also aided by first-time deals with new customers, supported by its firm focus on introducing products and the go-to-market sales strategy. We expect TWLO’s top line to witness a CAGR of about 7.9% from 2023-2025.
Zacks Rank #2 Twilio has an expected revenue and earnings growth rate of 6.3% and 9.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.4% over the last seven days.