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Internet stocks have been off to a great start in 2020.All thanks in part to increased ad spending, and higher user growth.

In fact, advertising and marketing spending could explode to nearly $390 billion in 2020 alone. Even the World Advertising and Research Center has said ad spending will increase 6% this year to $656 billion, with more than half going towards digital advertising for the first time.

Big viral events like the 2020 Olympics and the U.S. presidential election should give a boost to related stocks as well through sponsorships. With such growth in store, it only makes sense to look at the companies benefiting from it.

So, lets take a look at three of the best internet stocks out there.

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Shares of Facebook (NASDAQ:FB) slipped in late January 2020 after reporting rising costs, and a narrowing operating margin. All after beating on the top and bottom lines with earnings per share (EPS) of $2.56, as compared to $2.53 expectations on sales of $21.08 billion, as compared to estimates for $20.89 billion.

However, FB stock is just beginning to recover.

Granted, the company does expect further deceleration of revenue growth, as noted by CFO Dave Wehner. At the same time, however, FB is seeing monumental user growth with a current base of 2.5 billion monthly active users (MAUs) up 2% from the third quarter of 2019. FB is also monetizing its private messaging apps, and testing direct ads and click-to-messaging ads.

Furthermore, analysts remain bullish on the FB stock as well. Oppenheimer analyst Jason Helfstein notes that, user growth and engagement remain strong, and focus on SMB advertisers should drive continued higher monetization. With that, he increased his target price for FB stock from $230 to $265.

Overall, Facebook is a great option for investors looking to grab one of the great internet stocks for 2020.

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After toppling over in late 2019 on technical issues and bugs that weighed on revenue growth, shares of Twitter (NYSE:TWTR) are pushing higher once again.

In fact, year-to-date, shares are up nearly 22% and running on user data. While TWTR did miss estimates, other key numbers gave investors reason to cheer. For one, TWTR showed it had more users at the end of 2019 than many expected. Two, the company also showed revenue growth was again accelerating.

EPS of 25 cents missed estimates calling for 29 cents. However, sales ballooned to $1.01 billion as compared to expectations for $996.7 million. Even better, the companys monetizable daily active users (mDAUs) exploded to 152 million as compared to estimates for 147.5 million users.

Moreover, analysts are bullish, including Lightshed Partners Richard Greenfield who initiated a buy rating on the stock with a $45 price target:

Revenue growth typically trails user growth, as it takes time for advertisers to revalue the reach of a platform, Greenfield wrote. In Twitters most lucrative market, the U.S., it is growing users at a far faster rate thanFacebook(FB) and Snapchat (SNAP), albeit the base is still a fraction of those two companies. We believe this creates the ability to reaccelerate revenue growth meaningfully as Twitter moves through 2020.

Collectively, TWTR is another member of the great internet stocks in 2020.

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No list of top internet stocks is complete without Amazon (NASDAQ:AMZN).

The AMZN stock continues to be an absolute beast. Since the year began, shares are up another 16% with no signs of turning lower; All thanks to a big earnings beat at the end of January. EPS of $6.47 was well above expectations for $4.03 per share, while revenue of $87.44 billion was above expectations for $86.02 billion.

Furthermore, Amazon Web Services came in at $9.95 billion, as compared to estimates for $9.81 billion. Then, it gave upbeat guidance and said revenue could fall between $69 billion and $73 billion for Q1 2020.

So, no wonder Morgan Stanley just added AMZN to its fresh money buys list, noting earnings and forecasts were very strong and not just better than expected. Analyst Brian Nowak says AMZN stock could continue to climb on the heels of investments in its one-day shopping, which is accelerating share gains even faster than expected.

That said, Amazon is clearly continuing to thrive in a number of areas which makes it one of the best choices investors could make when looking to add internet stocks to their portfolio.

As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.

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The Top 3 Internet Stocks Surging in 2020 - Investorplace.com