Over 64% of the world's population has accessed the internet, according to InternetUsageStats.com.
With more people accessing the web via their smart phone, you will see companies post larger revenue numbers and net profits as more individuals get connected online.
The problem is there are many internet stocks to buy so how do you choose the best ones? We are here to help you save time and identify the most popular and lucrative internet stocks to invest in.
We compiled a list of the best internet stocks that sustain strong revenue growth, high visitor traffic, and long term profits. If you want to buy a piece of the internet, then these are the best internet stocks to consider for your portfolio.
List of Best Internet Stocks
- AirBNB (NASDAQ: ABNB)
- Alibaba (NASDAQ: BABA)
- Amazon (NASDAQ: AMZN)
- Booking Holdings
- eBay (NASDAQ: EBAY)
- Etsy (NASDAQ: ETSY)
- Facebook (NASDAQ: FB)
- Fiverr (NASDAQ: FVRR)
- Godaddy (NASDAQ: GDDY)
- Google (NASDAQ: GOOG)
- Match (NASDAQ: MTCH)
- Jumia (NASDQ: JMIA)
- Linkedin (NASDAQ: LNKD)
- Netflix (NASDAQ: NFLX)
- Pinterest (NYSE: PIN)
- Snapchat (NASDAQ: SNAP)
- Spotify (NASDAQ: SPOT)
- Twitter (NASDAQ: TWTR)
- Uber (NASDAQ: UBER)
- Yelp (NASDAQ: YELP)
- Zoom (NASDAQ: ZM)
- Zillow (NASDAQ: Z)
Internet Stock Buyer's Guide – How to Pick the Best Stocks
Unlike brick and mortar businesses, you may notice that internet companies tend to come and go. AOL & Yahoo! dominated search before Google. Myspace was king before Facebook took over the throne. The internet requires a different type of business to succeed because changes can be implemented extremely fast.
Key Internet Stock Factors to Consider
There are several factors that you want to pay attention to when looking for the best internet stocks to buy:
- Brand & Moat – Select companies with an established brand and competitive advantage over their competition (ex. Facebook).
- Physical Product Distribution – People need everyday products and companies that sell physical goods have a higher chance of succeeding in the long term (ex. Amazon.com).
- Loyal Userbase – Certain companies build a loyal following that falls in love with their core product (ex. Netflix).
- User Generated Content – Companies that thrive on user generated content dedicate less capital to content creation and can focus on increasing traffic and boosting net profits (ex. eBay).
Target Stocks with high Monthly Active Visitors
It's easier to increase revenue when your monthly active visitors keeps increasing. I like to invest in internet companies with a huge and fast growing visitor total. If you look at the chart above, you will notice several companies attract well over 1 billion visitors per month.
These are incredible traffic numbers and show how dominate these websites are in their respective market. The one exception is Paypal who doesn't have billions of visitors, but earns money through transaction volume. They don't need large traffic to make good money.
Social Media Websites Are the Riskiest Stocks to Invest In
Social media is the biggest craze around the internet, but investing too much money in social media stocks can be dangerous. These companies deliver zero physical products, meaning they need to sell advertisements to make money. If you remember just a few years ago, Myspace was the largest social media site on the internet.
However, they lost their power due to the anonymity of its userbase. People are looking for transparency nowadays so companies like Facebook and Linkedin have a better chance of staying profitable in the future.
Final Thoughts and Closing Statements
Internet stocks provide an awesome opportunity for fast growth due to their viral nature. However, you must analyze each company individually and take a look at key data stats like P/E Ratio, Earnings Per Share growth, monthly active users, and overall market capitalization.
All these factors help build an honest assessment of each internet stock to help you make the right decision with your money.
Did I miss an internet stock to buy? Please leave any companies I forget about in the comments.