Industry Description
The Zacks Internet - Content industry comprises providers of video encoding platforms, personal services, Internet content and information, staffing and outsourcing services, publishing, capital markets, media-based, home service, digital insights and measurement, stock photo, video and music licensing, and online travel companies. The industry is witnessing a rapid change in consumer behavior and ongoing digitalization. Advertising is a major revenue source for industry participants. Therefore, these companies are trying to expand their digital presence to win customers. They are also expanding their presence across social media, display, connected TV and search. Apart from the United States, a number of companies in this industry are located in Israel, the U.K., Germany, Russia and China.
4 Trends Shaping the Future of the Internet - Content Industry
Demand for Digital Offerings Growing: The shift from traditional search to AI assistants, conversational interfaces, and agentic AI is reshaping how users discover content and interact online. The companies in the Zacks Internet Content industry are continually adapting their products, monetization strategies and distribution models to remain relevant as user behavior evolves and AI platforms become new gateways to digital content.
Industry Prospects Driven by Ad Spending Rate: Industry participants are focusing on marketing efforts to boost traffic to websites. Advertising and subscriptions are major revenue sources for these companies. The industry is dependent on consumer spending trends, making holiday spending a major deciding factor. However, macroeconomic challenges are expected to hurt ad spending.
Rising Competition for Users, Content and AI Leadership : The industry is facing intense competition for user engagement, premium content creators and enterprise customers. User engagement alone is no longer enough. Companies must consistently improve advertising ROI, increase customer retention, expand cross-selling and introduce new monetization models such as AI licensing and consumption-based pricing.
Increasing Regulations Mar Prospects: Industry participants involved in online search and other social networking activities are increasingly facing regulatory pressure, particularly in China and the European Union (“EU”). The China government has a number of regulations related to direct advertising, which is a prime revenue source for these companies. The implementation of the General Data Protection Regulation in the EU adds to the concerns. Enactment of the Digital Markets Act (DMA) in the EU aims to prevent large online platforms that connect users with content, goods, information and services from abusing their market power. The DMA adds to the headwinds faced by Internet content providers in the EU.
Zacks Industry Rank Indicates Dim Prospects
The Zacks Internet - Content industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #187, which places it in the bottom 24% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dim near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. Since Jan. 31, 2026, the Zacks Consensus Estimate for the industry’s 2026 earnings has moved down 7%.
Given the bearish industry outlook, there are only a few stocks worth buying. But before we present the stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock market performance and valuation.
Industry Lags S&P and Sector
The Zacks Internet - Content industry has underperformed the broader Zacks Computer and Technology sector, as well as the S&P 500 composite, over the past year.
The industry has declined 36.1% over this period compared with the S&P 500 sector’s appreciation of 21.1% and the 27.4% increase of the broader sector.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month price-to-sales ratio (P/S), which is a commonly used multiple for valuing Internet – Content stocks, we see that the industry is currently trading at 2.72X compared with the S&P 500’s 4.95X and the sector’s 8.67X.
Over the last five years, the industry has traded as high as 6.37X and as low as 3.25X, the median being 5.34X, as the charts below show.
Trailing 12-Month Price-to-Sales (P/S) Ratio
2 Internet Stocks to Watch
Similarweb: This Zacks Rank #2 (Buy) company is benefiting from rising demand for digital intelligence from Large Language Model (LLM) developers and enterprises. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company signed one large LLM licensing contract in the first quarter of 2026, continues to pursue additional AI data deals, launched ChatGPT MCP integration, and is seeing strong adoption of AI Studio, which introduces a higher-value, consumption-based revenue model. Similarweb believes AI is expanding its addressable market across data licensing, AI products and ecosystem partnerships. Similarweb expects net revenue retention (NRR) to improve through customer expansion and cross-selling while maintaining positive free cash flow.
The Zacks Consensus Estimate for SMWB’s 2026 earnings has been steady at 15 cents per share over the past 30 days. Similarweb shares have dropped 20.8% on a year-to-date basis.
Price & Consensus: SMWB
Opera: This Zacks Rank #3 (Hold) stock continues to deliver robust revenue growth, expanding AI-powered browser capabilities and raising 2026 guidance. Opera’s Browser Connector, AI integrations and growing user engagement support its long-term outlook, but many AI initiatives remain in the early stages. The company is still working to convert higher AI engagement into durable revenue streams while navigating upcoming search partnership renewals and execution risks associated with scaling new AI-driven monetization models.
However, Opera expects higher hosting costs and AI infrastructure expenses due to increased AI usage and supply constraints, which could limit margin expansion despite healthy top-line growth. The Zacks Consensus Estimate for Opera’s 2026 earnings has been steady at $1.40 per share over the past 30 days. OPRA shares have surged 9.1% YTD.
Price & Consensus: OPRA
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This article originally published on Zacks Investment Research (zacks.com).