Jefferies Out With 10 Incredible Internet Predictions for 2018

By Lee Jackson Updated Jan 12, 4:39AM EST · Published Jan 10, 7:40AM EST

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Jefferies Out With 10 Incredible Internet Predictions for 2018 — © Thinkstock

Needless to say, the internet has become a ubiquitous and integral part of our lives, and with the applications and innovations spiraling higher every year, the parabolic growth rate looks to continue far into the future. One of the amazing attributes of the internet is the incredible growth each year over a multitude of platforms, and while one would sense there is a degree of oversaturation in the cards, the fact of the matter is that seems very unlikely.

Each year in January, the internet team at Jefferies comes out with the firm’s top predictions and stocks for the new year, and 2018 is no exception. Given the huge outperformance of the group last year, the Jefferies analysts continue to remain bullish, but they also feel that it makes sense to stick with the large cap leaders as valuations are stretched.

Here are the Jefferies top 10 internet predictions for 2018.

1. Alphabet Inc. (NASDAQ: GOOGL) will outperform Facebook Inc. (NASDAQ: FB) and Amazon.com Inc. (NASDAQ: AMZN).

2. Amazon breaks into digital advertising in a much bigger way in 2018. The analysts think worldwide advertising revenues jump a spectacular 50% and they grow to number three spot in the market.

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3. Marketers continue the push to digital video, as advertising dollars close the gap to consumption, with Facebook and Google’s YouTube as the big winners.

4. Large cap internet stocks outperform small and mid-cap stocks.

5. Amazon Web Services moves up the stack into the application layer, thereby doubling its market opportunity.

6. The recent U.S. tax reform package could drive a 15% to 20% earning tailwind for Amazon and Intuit Inc. (NASDAQ: INTU).

7. Autonomous rides are on the way to a town near you soon. Waymo’s option value jumps for Google.

8. Video game digital and microtransaction tailwinds continue full speed ahead. Activision Blizzard Inc. (NASDAQ: ATVI) and Take-Two Interactive Software Inc. (NASDAQ: TTWO) outperform Electronic Arts Inc. (NASDAQ: EA) in 2018.

9) While Priceline Group Inc. (NASDAQ: PCLN) and Expedia Inc. (NASDAQ: EXPE) continue to dominate online travel, Google Travel starts to make inroads.

10) Match Group Inc. (NASDAQ: MTCH) continues to do well and is a top mid-cap company to Buy at Jefferies. The analysis notes the massive 40% short interest, which Jefferies feels gets washed out as new monetization opportunities arise.

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There you have it, the top calls from the internet analysts at Jefferies for 2018. One thing is for sure, as the internet age has started to grow beyond infancy, the leaps and bounds in technology and applications continue to come at a furious rate. It’s a good bet that trend stays in place for decades to come.

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About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.