Piper Sandler's latest sector analysis highlights improving digital advertising dynamics that support a favorable view of select internet equities as the market moves into the first quarter of 2026. The firm's data show January digital market results arriving roughly 40 basis points ahead of the prior month's expectations, while February market estimates moved about 190 basis points higher - a trajectory the firm interprets as continued strength in ad spending across major platforms.
The rankings produced by Piper Sandler emphasize advertising performance measures and user engagement trends. Three companies - Meta Platforms, Reddit and Roku - top the list based on a combination of pricing, impression and user metrics reported through the period under review.
Meta Platforms
Meta is among the leaders in the Piper Sandler assessment as cost per thousand impressions growth ticked upward in January. The firm notes that Meta appears positioned to accelerate in the first quarter of 2026, though impressions may see only limited expansion during that period. Within Meta's portfolio, Facebook Blue is singled out for materially improved social traffic share, suggesting a stronger position in social engagement.
Piper Sandler also highlights a reduction in advertising units from Temu, an industry development the firm views as potentially favorable to Meta's competitive position in the digital ad market. Separately, Meta Platforms is the subject of a government investigation in Spain, where prosecutors have been ordered to examine allegations involving the spread of AI-generated child sexual abuse material on its platforms. The investigation represents a regulatory and reputational issue noted alongside the advertising performance data.
Reddit showed meaningful month-over-month user growth in January, adding 31 million monthly active users. The expansion was driven primarily by Conversation, which contributed 26 million users, and Feed, which added 5 million users. Piper Sandler characterizes this user growth as a potential source of upside for the firm's first quarter 2026 daily active user estimates.
Advertising pricing metrics at Reddit - including cost per click and cost per thousand impressions - have been described as choppy, but both measures recorded upticks during the period under review. The firm also references Reddit's fourth-quarter 2025 financial results, in which revenue rose 70% year-over-year to $725.6 million and adjusted EBITDA increased 112%. Following those results, several analyst actions were reported, including an reiterated Buy from Needham and a price target increase from Truist Securities.
Roku
Roku completes the top three in Piper Sandler's rankings, supported by stable advertising fundamentals. Ad pricing at the platform is noted to remain roughly consistent at approximately $10 cost per thousand impressions, and pixel helper users increased month-over-month to around 724 users, a signal the firm interprets as rising advertiser engagement.
In addition, Piper Sandler's ad buyer survey saw first quarter 2026 spending results revised 180 basis points higher compared with December's initial expectations, suggesting improving advertiser confidence in Roku. The company also reported a strong fourth quarter, with revenue and EBITDA exceeding Street expectations by 3% and 17%, respectively. Those results prompted positive analyst actions referenced by the firm, including an upgrade to Buy from Rosenblatt and a price target increase from Evercore ISI.
What the rankings reflect
Piper Sandler's rankings are grounded in advertising performance metrics and user engagement indicators heading into the first quarter of 2026. The firm points to sustained ad-spend strength and sequentially higher market estimates as the basis for its favorable stance on the selected internet names.
The analysis surfaces both operational metrics - such as ad pricing and impression trends - and user engagement data that together inform near-term expectations for revenue drivers across social and streaming platforms.