Dan Moskowitz: Top 10 Internet Stocks For 2015

APPLEmight seem expensive, but it’s only trading at 17 times earnings, which isn’t high for a tech company. According to the Wall Street Journal, it will reach a $1 trillion market cap if the stock appreciates another 30%. Given Apple’s history of exceeding expectations, this seems fathomable.

AMAZON.COM has underperformed as of late, primarily because investors are tired of waiting for consistent profitability. But you can’t knock Amazon’s relentless top-line growth. A lot of this has to do with the company’s innovative ways. It’s currently the top player in the public cloud business, it’s the largest online retailer in the world, it’s a big player in the online streaming business, its Kindle has demonstrated staying power, it might offer drones for delivery in the future, it’s likely to expand Amazon Fresh in the future, and it owns a variety of household brands like IMDb, Alexa, audible.com, and Zappos.com. It’s possible that Amazon fails to deliver stock appreciation in 2015, but Amazon has the potential to be the Coca-Cola Co. (KO) of the internet over the next half-century.

WIX.COMoffers website and mobile app building platforms that are easy for anyone to use. No experience necessary. The company has been growing in popularity, which is evidenced by its 74% year-over-year revenue increase in FY2014. Wix has 59 million users, and that number is likely to continue to move higher, but Wix isn’t profitable. It makes this list because of its potential, not because of its resiliency.

FACEBOOK ventured into the mobile advertising space and hit a home run. Better yet, that growth is very likely to continue. Overall, Facebook now has 2 million active advertisers, which is a 33% increase over the past six months. As of Dec. 31, 2014, Facebook had 1.19 billion monthly active users. Therefore, advertisers should continue to flock to Facebook.

FIREEYE detects, prevents, and resolves advanced cybersecurity threats. These services are in high demand. According to the Cybersecurity Market Report, the cybersecurity industry is expected to reach $155 billion by 2019 (up from $71 billion in 2014). FireEye sells its services to over 2,750 customers in 67 countries, including 159 of Fortune 500 companies. FireEye’s compounded annual growth rate from 2010-2013: 139%. It also increased its headcount to 2,402 from 1,678 in 2014 vs. 2013. It's not easy to find companies that are increasing their headcount right now.

NICE SYSTEMS provides software solutions that enable organizations to take action in order to improve customer experience and business results, ensure compliance, fight financial crime, and safeguard people and assets.” Simply put, this Israeli company specializes in surveillance via telephone voice recording, as well as data security and systems that analyze recorded data. Under a new CEO, NICE Systems reported record revenue of $294 million in its fourth quarter (representing 9% year-over-year organic growth)

COGENT COMMUNICATIONS provides high-speed Internet access and Internet protocol communication services. In the third quarter, Cogent’s revenue increased 9% year over year. Customer connections increased 15% to 44,630. Furthermore, EBITDA improved 9.8%. Cogent currently yields 3.20% — not bad for a company showing top- and bottom-line growth.

NETFLIX isn’t a no-brainer due to increasing costs and intense competition, but the cord-cutting trend is going to favor Netflix Inc. (NFLX). Today’s consumer wants to cut costs, and ditching cable for a streaming service is a sure way to do it. And while Netflix does pose some risks, it’s going to consistently create more original content. Some will be winners and some will be losers, but thanks to original programming, it has earned enough trust from the viewing population that it will always be given another shot. The online streaming market is only going to grow, and Netflix is at the front of the pack (at least for now). As far as pitfalls go, CEO Reed Hastings has proven that he’s capable of steering the ship back on course.

VEEVA SYSTEMS provides solutions that enable pharmaceutical and other life sciences companies to realize the benefits of cloud-based architectures and mobile applications for various business functions. Veeva offers more advanced and industry-specific technology than its rivals, which has allowed it to garner an approximately 45% share in the life sciences market. It’s also Salesforce.com’s (CRM) preferred and recommended platform for sales automation solutions.

BAIDU is the Google of the East. However, unlike Google, Inc. (GOOG), the massive amount of people that are still not online in China presents a tremendous growth opportunity. Based on populations, the user-potential for Baidu is approximately four times that of Google. Additionally, Baidu hasn’t hesitated to grow inorganically, scooping up smaller companies left and right. Once this approach is in motion, it often leads to the parent company becoming a mainstay brand in its country of origin. Baidu is also innovative, recently investing $300 million in an artificial intelligence project. It also invested $600 million in Uber, and now it’s now partnering with Hyundai Group to explore connected cars.