NEW YORK (TheStreet) -- Internet stocks are about to begin a multi-year positive run, driven by the proliferation of connected devices and increased advertising, Credit Suisse analyst Stephen Ju wrote in a note to investors today. Ju identified Facebook (FB) - Get Report , Google (GOOG) - Get Report , (GOOGL) - Get Report , Amazon (AMZN) - Get Report , Yelp (YELP) - Get Report and LinkedIn (LNKD) as his favorite names in the sector. All of the names except Amazon are outperforming the market today.
WHAT'S NEW: The surge in the number of connected devices should lead to higher user engagement, which in turn should cause demand for Internet ads to increase, the analyst predicted. Despite his optimism, Ju does not expect stocks to be driven higher by macro themes this year. Instead, he expects more narrowly focused themes to drive some Internet stocks higher in 2015. Facebook should benefit from the growth of its Premium Video offerings in 2015, the analyst stated. Over the longer term, the company's newer products and its monetization of more of its content should enable it to report better than expected results, added Ju. Google has a number of potential positive catalysts, including higher prices for mobile clicks, reduced growth of its capital expenditures, and higher than expected display revenue, driven partly by the strength of YouTube, Ju believes. Meanwhile, Amazon should benefit from lower shipping costs and stronger international growth as it laps difficult international comps, Ju predicted. The analyst predicted that LinkedIn would be boosted by a faster than expected ramp of its data tool for sales professionals, as wells as an acceleration in the growth of its Marketing Solution product and price increases on its product for recruiters. Finally, Yelp could benefit from launching mobile ad products and from its high level of consumer engagement, Ju stated.
PRICE ACTION: In early trading, Facebook rose fractionally to $76.57, Google gained 0.6% to $500, Amazon fell 2.5% to $287, LinkedIn slid 0.3% to $222, and Yelp was fractionally lower near $53 per share.
Reporting by Larry Ramer.
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