4 Internet Stocks Poised to Top Estimates This Earnings Season
First-quarter 2026 presented Internet stocks with a turbulent yet opportunity-rich landscape, as the sector navigated geopolitical tensions while underlying artificial intelligence monetization trends gained meaningful momentum. Resilient digital advertising demand, accelerating enterprise AI adoption and a supportive monetary policy environment in the first quarter are likely to have laid the groundwork for improving sentiment heading…
First-quarter 2026 presented Internet stocks with a turbulent yet opportunity-rich landscape, as the sector navigated geopolitical tensions while underlying artificial intelligence monetization trends gained meaningful momentum. Resilient digital advertising demand, accelerating enterprise AI adoption and a supportive monetary policy environment in the first quarter are likely to have laid the groundwork for improving sentiment heading into the second quarter.
Drawing on our proprietary research and market insight, we’ve identified four Internet stocks — Block XYZ, Arista Networks ANET, Meta Platforms META and Alphabet GOOGL — that appear well-positioned to beat earnings estimates this season.
The artificial intelligence buildout remained the sector’s defining catalyst during the first quarter. Hyperscalers reaffirmed aggressive plans, with Amazon, Alphabet, Meta and Microsoft collectively expected to deploy roughly $720 billion in 2026 capex to strengthen AI leadership. Meta alone reiterated a $115-$135 billion capex plan dedicated to compute, data centers and AI talent. Generative AI tools transformed digital advertising workflows, with Gemini-powered Performance Max and agentic advertising platforms accelerating adoption, while Amazon Advertising’s display and sponsored-ad revenues expanded at a 24.7% annualized pace, underscoring the monetization runway ahead.
Digital advertising markets demonstrated encouraging resilience during the quarter, supported by improved AI-driven targeting and creative automation. Facebook CPMs firmed approximately 8% as advertisers competed for higher-intent inventory, and AI Mode in Search unlocked new ad formats bridging inspiration and conversion. Social commerce expansion, creator-led commerce on YouTube and chatbot-enabled funnels further reinforced tailwinds for advertising-dependent players.
The Federal Reserve’s policy stance remained supportive through the quarter, with the federal funds rate holding at 3.5-3.75%, and a positively sloped yield curve, steepening to 51 basis points by quarter-end, signaling expectations for continued economic expansion.
The quarter also brought notable headwinds. Tensions tied to the geopolitical conflict, rising oil prices, and renewed inflation concerns weighed on growth stocks, while fears that AI could disrupt traditional software business models triggered a sharp selloff. Meta dropped 13.3%, Amazon fell 9.8%, and Alphabet declined more than 8% during the quarter. Tariff discussions and scrutiny of hyperscaler returns added to the cautious tone.
Cost discipline emerged as another first-quarter theme, with Meta trimming roughly 10% of its workforce, affecting nearly 8,000 positions, and Microsoft extending voluntary buyouts to approximately 7% of U.S. employees. These moves signaled a focus on operating leverage as AI infrastructure spending scaled.
Overall, first-quarter 2026 marked a transitional period for Internet stocks, balancing near-term pressures against powerful secular drivers. With AI monetization deepening, digital advertising strengthening, hyperscaler capex commitments intact, and valuations resetting to attractive levels, the sector appears well-positioned for improved momentum ahead.
With the presence of several industry participants, finding the right software stocks with the potential to beat on earnings can be daunting. Our proprietary methodology, however, makes this task fairly simple.
You could narrow down your choices by looking at stocks that have the perfect combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks that have the maximum chances of beating estimates in their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this favorable mix of ingredients, the odds of a positive earnings surprise are as high as 70%.
Given below are four Internet stocks that have the favorable combination to beat on earnings this reporting cycle:
Block is scheduled to report first-quarter 2026 results on May 7. The company has guided first-quarter gross profit growth of 22% year over year to $2.80 billion and Adjusted Operating Income of $600 million. Momentum carried over, with Square GPV growth having accelerated to more than 12% through Feb. 24. Cash App is likely to have benefited from Primary Banking Active expansion, Borrow origination strength, Afterpay Post-Purchase traction, and Cash App Green adoption. Recent wins, including March restaurant partnerships and expanded lending scale topping $200 billion cumulatively, support the setup. The February workforce restructuring is expected to have more meaningfully impacted profitability in the first quarter.
The Zacks Consensus Estimate for earnings has remained steady at 68 cents per share in the past 30 days. The company currently has an Earnings ESP of +3.51% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Block, Inc. Price and EPS Surprise
Block, Inc. price-eps-surprise | Block, Inc. Quote
Arista Networks is scheduled to report first-quarter 2026 results on May 5. The company currently has an Earnings ESP of +2.79% and a Zacks Rank #2. The company guided for revenues of approximately $2.6 billion, non-GAAP gross margin of 62-63%, and non-GAAP operating margin of roughly 46%, implying continued momentum from its record 2025 performance. Robust demand from cloud and AI titan customers is likely to have underpinned the top line, supported by sustained strength across data center and campus deployments. The recent R4 platform rollout, VESPA campus mobility innovation, and the XPO liquid-cooled optics MSA announced in March positioned Arista favorably for AI networking. Elevated purchase commitments and deferred revenue growth are expected to have suggested a robust order backlog.
The Zacks Consensus Estimate for earnings has remained steady at 81 cents per share in the past 30 days.
Arista Networks, Inc. Price and EPS Surprise
Arista Networks, Inc. price-eps-surprise | Arista Networks, Inc. Quote
Meta Platforms is set to report first-quarter 2026 results on April 29, with guidance calling for revenues of $53.5-$56.5 billion, underpinned by robust demand carrying over from fourth-quarter 2025 and a projected 4% foreign-currency tailwind. AI-driven ad ranking, Advantage+ adoption and accelerating click-to-message growth are likely to have supported Family of Apps momentum, while WhatsApp paid messaging topping a $2 billion run rate and Threads engagement are expected to have added upside. Infrastructure agreements with NVIDIA, Arm and Corning, alongside data-center expansions in El Paso and Tulsa, signal accelerated AI build-out. Elevated capex and Reality Labs losses remain watch items, though operating-income growth guidance lends optimism.
The Zacks Consensus Estimate for earnings has moved north by 0.3% to $6.71 per share in the past 30 days. The company currently has an Earnings ESP of +5.76% and a Zacks Rank #3.
Meta Platforms, Inc. Price and EPS Surprise
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote
Alphabet is set to report first-quarter 2026 results on April 29. The company currently has an Earnings ESP of +1.95% and a Zacks Rank #3. First-quarter results are likely to benefit from strong momentum across Google Services and Google Cloud, building on fourth-quarter 2025 strength that saw consolidated revenues rise 18%. The November 2025 Gemini 3 launch and March 2026’s Gemini 3.1 Pro are likely to have deepened user engagement, with Google Search revenues and subscriptions each rising 17% in the prior quarter. Accelerating enterprise AI adoption, reflected in the $240 billion Google Cloud backlog and growing Gemini Enterprise traction, is likely to have supported robust Cloud growth, aided by a favorable foreign exchange tailwind. However, elevated depreciation from ramping 2026 capital expenditure investments is expected to have pressured margins.
The Zacks Consensus Estimate for earnings has remained steady at $2.64 per share in the past 30 days.
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
Block, Inc. (XYZ) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
