2 internet stocks to buy on the recent pullback: JP Morgan

Investing.com -- JP Morgan recommended buying these two stocks after the recent pullback in internet stocks given their strong fundamentals and resilient business models.JP Morgan’s internet coverage universe has declined 14% on average since market highs on February 19, underperforming the S&P 500, which is down 8%.Brokerage recommended Meta Platforms (NASDAQ:META) and Spotify Technology (NYSE:SPOT). While the internet sector is not immune to macroeconomic slowdowns, JP Morgan sees Meta and Spotify as well-positioned to weather potential headwinds.

Meta Platforms remains JPMorgan’s top pick, with analysts highlighting its leadership in AI and its upcoming launch of Llama4, which is expected to enhance core monetization and long-term growth."META has tens of millions of advertisers and performance/DR ad spending accounts for 80%+ of ad revenue," JP Morgan wrote.The bank reiterated its Overweight rating and maintained a $725 price target, projecting 2025 capex at $65 billion (+73%) and 2026 capex at $76 billion (+18%).JP Morgan expects 2025 revenue growth to be driven by core optimizations, AI investments, and video unification initiatives such as Reels and Click-to-Message.

Spotify is also seen as a strong buy, with 2025 set to be a year of accelerated execution across Music, Podcasts, Audiobooks, and Video.JP Morgan forecasts average revenue growth of +14% for 2025 and 2026, with gross profit growth of +20%, operating income up +47%, and free cash flow growth of +24%, supporting a premium valuation.The bank sees Spotify’s growth investments leading to deeper user engagement and stronger monetization over time.

For more defensive names in case of a deeper macro downturn, analysts pointed to Netflix (NASDAQ:NFLX), eBay (NASDAQ:EBAY), and Chewy (NYSE:CHWY) as better positioned due to their resilient business models.Netflix benefits from strong user engagement and its affordable ad-supported tier, while eBay and Chewy are supported by focus categories and a high proportion of non-discretionary sales, respectively.

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