JP Morgan’s Top Internet Stock Picks Amid Recent Market Pullback

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Expert Insights on Meta and Spotify Investment Opportunities / Reuters

JP Morgan has pinpointed two standout internet stocks to buy on the recent market pullback, spotlighting Meta Platforms (META) and Spotify Technology (SPOT) as prime investment opportunities for savvy investors looking to capitalize on undervalued assets with strong fundamentals. With the internet sector experiencing a notable 14% average decline since its peak on February 19, 2025, compared to the S&P 500’s more modest 8% drop, the brokerage sees these stocks as resilient leaders capable of thriving despite macroeconomic headwinds. This analysis dives deep into why Meta and Spotify are top picks, explores their growth drivers, and highlights additional defensive options like Netflix, eBay, and Chewy for those eyeing stability in uncertain times, offering a comprehensive guide for investors seeking the best internet stocks to buy now.

Meta Platforms emerges as JP Morgan’s flagship recommendation, lauded for its pioneering role in artificial intelligence and its robust advertising ecosystem, making it one of the best internet stocks to invest in during a market downturn. The brokerage emphasizes Meta’s upcoming Llama4 launch, an advanced AI model expected to supercharge core monetization efforts and solidify its long-term growth trajectory. With tens of millions of advertisers fueling its platform, Meta derives over 80% of its ad revenue from performance and direct-response (DR) spending, a testament to its unmatched scalability and resilience. JP Morgan has reaffirmed its Overweight rating, setting a lofty $725 price target, buoyed by projections of $65 billion in capital expenditures for 2025 (a 73% surge) and $76 billion in 2026 (up 18% from the prior year). These investments are poised to drive revenue growth through core optimizations, AI enhancements, and video unification strategies like Reels and Click-to-Message, positioning Meta as a powerhouse among internet stocks to buy on the dip. The company’s ability to leverage AI for advertising efficiency and user engagement makes it a compelling choice for investors searching for long-term value in the tech sector.

Spotify Technology, meanwhile, earns its spot as a top internet stock pick thanks to its ambitious “Year of Accelerated Execution” slated for 2025, a period JP Morgan predicts will turbocharge growth across its Music, Podcasts, Audiobooks, and Video offerings. This multifaceted expansion is designed to deepen user engagement and bolster monetization, key factors that elevate Spotify among the best internet stocks for growth investors. The brokerage forecasts an impressive average revenue growth of 14% for both 2025 and 2026, alongside gross profit growth of 20%, operating income soaring by 47%, and free cash flow climbing 24%. These robust financial projections underpin Spotify’s premium valuation, reflecting confidence in its ability to deliver consistent returns even as the broader internet sector falters. By investing heavily in content diversification and user experience, Spotify stands out as a dynamic player, making it one of the top internet stocks to buy on the recent pullback for those prioritizing innovation and market adaptability.

For investors wary of a potential economic slowdown, JP Morgan also highlights a trio of defensive internet stocks, Netflix (NFLX), eBay (EBAY), and Chewy (CHWY), each equipped with business models built to weather tougher conditions. Netflix shines with its strong user engagement and cost-effective ad-supported tier, appealing to budget-conscious consumers and reinforcing its status as a reliable pick among internet stocks to buy during uncertain times. eBay benefits from its focus on stable, non-discretionary categories, ensuring steady demand regardless of economic fluctuations, while Chewy thrives on its high proportion of essential pet-related sales, a sector known for its recession-resistant qualities. These stocks offer a safety net, complementing the growth-oriented appeal of Meta and Spotify, and catering to those searching for the best internet stocks to invest in for both stability and upside potential.

Delving deeper into the sector’s dynamics, JP Morgan notes that certain internet subgroups, such as streaming providers, cloud services, and ride-sharing, are likely to outperform in challenging economic climates, while e-commerce, online travel, and digital advertising face greater risks. Meta and Spotify align with the resilient streaming and digital media segments, bolstered by their strategic advancements in AI and content expansion, respectively. This subgroup analysis underscores why these stocks are prime candidates for investors looking to buy internet stocks on the dip, as their business models are less vulnerable to macroeconomic pressures compared to peers in more discretionary categories.

To provide a clearer picture, JP Morgan’s financial outlook for Meta and Spotify paints a compelling case for investment. Meta’s projected $65 billion capex in 2025 and $76 billion in 2026 signal a bold commitment to infrastructure and innovation, driving revenue through AI and video initiatives. Spotify’s anticipated 14% revenue growth, paired with significant jumps in gross profit, operating income, and free cash flow, highlights its potential for sustained profitability. These metrics offer investors a data-driven rationale for targeting these stocks, enhancing their appeal as some of the best internet stocks to buy on the recent market pullback.

JP Morgan’s recommendations come at a pivotal moment, with the internet sector navigating a 14% downturn that has created buying opportunities for discerning investors. Meta Platforms and Spotify Technology stand out for their growth potential and resilience, while Netflix, eBay, and Chewy provide defensive alternatives for those prioritizing stability. Together, these picks form a balanced strategy, addressing both aggressive and cautious investment approaches. For anyone researching the best internet stocks to invest in amid a market correction, this analysis offers actionable insights, grounded in JP Morgan’s expert perspective and forward-looking projections, ensuring investors are well-equipped to seize the moment.

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