Analyst Has 5 Incredible Internet Stock Predictions for 2019

By Lee Jackson Updated Jan 31, 1:58AM EST · Published Jan 16, 7:05AM EST

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Analyst Has 5 Incredible Internet Stock Predictions for 2019 — © Erikona / Getty Images

Without a doubt, the internet, which has had a spectacular growth cycle over the past 25 years, has become one of the single biggest leaps in technology as it applies to the consumer ever. The rate of growth has been and will continue to be staggering, and in a compelling new series on the National Geographic channel, “Valley of the Boom,” Millennials that were just being born at the dawn of the internet, can now see the feeding frenzy that it caused in Silicon Valley in the mid-1990s.

With huge jumps in technology, internet speeds that in some areas that have reached one gigabit, and literally hundreds of thousands of apps to choose from for every conceivable need, the internet’s future indeed is bright, and the fantastic growth rate is probably sustainable for years to come.

In a new research report, SunTrust’s internet and digital media analyst, Youssef Squali, not only presents the firm’s top picks in the sector, which we will cover on Thursday, but he also presents five bold predictions for 2019. In a sector that has come under increasing scrutiny over data leaks, customer data being used incorrectly, privacy concerns and a host of additional issues, many of the top stocks took a beating last year.

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Squali noted this in the report when sizing up the sector for investors:

We remain constructive on the Internet and Digital Media (IDM) group for 2019 and recommend that investors stay the course. Despite macro-economic and political concerns, regulatory and currency headwinds, we believe the drivers of secular growth remain in place while valuations have on average reverted back to the midpoint of their 5-yr historical range.

When discussing specific issues the sector faces, he also noted this:

A question we often get lately is which names within the IDM sector are more resilient to a recession, should one occur. In reviewing our coverage universe, it is clear to us that not all IDM names are created equal; some should be more resilient to an economic slowdown than others. We believe that those that operate mission critical applications on behalf of businesses (large and small), including Web presence and cloud computing should do relatively well.

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Here are the five top internet and digital Media predictions from SunTrust for 2019:

Facebook Inc. (NASDAQ: FB) will strengthen its board of directors with a new and very independent chairman.
IAC/InterActiveCorp (NASDAQ: IAC) will use the company’s very strong balance sheet to make its biggest acquisition yet. The company currently operates through Match Group, ANGI Homeservices, Video, Applications and Publishing segments.
Alibaba Group Holding Ltd. (NYSE: BABA | BABA Price Prediction) also is expected to also make a huge and splashy acquisition in Europe.
EBay Inc. (NASDAQ: EBAY) may become the target of activist investors. With a market cap of almost $30 billion, it may take some deep pockets to affect real change.
If President Trump and the United States are successful in forcing China to open up its market for U.S. businesses and to protect intellectual property, the prospects for the mega-cap technology companies like Alphabet Inc. (NASDAQ: GOOGL), Amazon.com Inc. (NASDAQ: AMZN) and Facebook could be substantial.

Any way you slice it, the prospects and growth possibilities for the internet and digital media remain massive, and while the barriers to entry have grown over the past 25 years, there will always be a place for something new and innovative that changes the status quo.

Investors looking to be in the mix may want to stay with the mega-cap leaders, as their entrenched power and huge cash balance sheets allow them to pursue and develop new areas and business silos quicker. That edge isn’t going away anytime soon.

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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.