As we have written before at great length, the Internet is still basically in diapers. The changes to come will be more profound than most of us can imagine. The Internet analysts at Merrill Lynch are of the opinion that there are 10 investment themes that will shape the Internet sector in 2014, including the ubiquitous Internet (mobile and wearable devices), the sharing economy, e-commerce delivery infrastructure build-out and social fragmentation. They think that the “mobile-first” companies are likely to have another year of outperformance.

The good news for the sector in 2014 is that the U.S. economy improved in the latter half of 2013. The strong housing rebound, declining unemployment and accelerating GDP growth all were significant. Plus, the macro shock risk from European debt issues has faded, at least for now. The Merrill Lynch economists expect 2.8% U.S. GDP growth to start 2014, improving in the second half, with 3.2% growth for the full year.

In a new research report, Merrill Lynch highlighted specific top 2014 Internet themes. We narrowed those to the ones that will have the greatest impact for investors going forward. We then selected the top stocks to buy from within those themes.

Amazon.com Inc. (NASDAQ: AMZN) is a top stock to buy and also fits right in the Merrill Lynch’s connected devices theme for 2014. Many Wall Street analysts view Amazon as an innovation leader and a top stock to own for 2014 and beyond. In addition to its online retailing muscle, the company has a gigantic cloud storage business that continues to dominate rivals. The Merrill Lynch price target for the stock is $435. The Thomson First Call estimate is $432.85 per share. Amazon closed Wednesday at $346.45.

eBay Inc. (NASDAQ: EBAY) may provide investors the best-risk reward profile in the Merrill Lynch coverage universe, given lower expectations, improved e-commerce trends and the fact the stock underperformed last year. The firm also believes eBay benefited from heavy promotions, seller incentives, scarcity of key items at other online and offline retailers and large PayPal mobile volumes. eBay fits nicely into the evolving delivery infrastructure theme. The Merrill Lynch price target for the stock is $64 and may be poised to go higher. The consensus target is $63.18 eBay closed Wednesday at $53.52.

Facebook Inc. (NASDAQ: FB) blew out earnings for the third quarter in a row and was up more than 15% after the gigantic earnings home run. It is also one of the top mobile Internet theme stocks for 2014. The company has totally revamped its mobile advertising arm, and the efforts are paying off big time. Every metric from the most users to margin expansion to soaring ad revenues has Wall Street still buzzing about the stock. The Merrill Lynch price target for the social media giant is $74. The consensus estimate is $70.01. Facebook closed Wednesday at $62.19.

Google Inc. (NASDAQ: GOOG) remains the 900-pound gorilla in the technology space. With everything from a dominate search platform to its Android operating system to YouTube, the company continues to lead the industry. Many analysts on Wall Street think that Google may use the YouTube platform to stream original programming, much like Netflix. In addition, the company has a mountain of cash, which at almost $55 billion provides ample room for innovation and acquisitions. It is perfect fit for the mobile Internet theme. The Merrill Lynch price target is $1,310 and the consensus target is $1,305.59. Google closed Wednesday at $1,143.20.

Pandora Media Inc. (NYSE: P) fits into the mobile Internet theme. The company has dominated Internet radio and it is now making a tremendous push to be a standard item in new cars. At the recent Consumer Electronics Show (CES) in Las Vegas, Pandora unveiled its monetization strategy for in-car systems. The company plans to introduce 15-second and 30-second audio advertisements while reducing ad frequency, as compared to its other platforms such as desktop, smartphone and tablet. The Merrill Lynch price target for the stock is $35 and the consensus figure is at $32.84. Pandora closed Wednesday at $35.83.

TripAdvisor Inc. (NASDAQ: TRIP) makes the sharing economy theme at Merrill Lynch. The company is looking to make the mobile booking experience the easiest in the travel industry. The company launched apps for Android and iOS in early October that help eliminate pop-up windows that crowd the app for each advertiser link. The Merrill Lynch price target is $90, and the consensus target for this top travel competitor is $82.30. The stock closed Wednesday at $76.16.

Mobile usage growth and monetization remains the main driver forward for Internet-specific stocks, with mobile minutes up 75%+ in 2013 and U.S. mobile usage now at 54% of total usage (as a percentage of total minutes per comScore). The Merrill Lynch team believes companies with growing mobile usage and/or higher mobile market share than on PC are best positioned to have upside surprises in the next 12 months. Their top stocks to buy are dominant Internet names, the kind of names that work well for most portfolios.

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