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Trading Internet stocks in the week ahead

With earnings season gearing up, some of CNBC's "Fast Money" traders turned their focus to Internet stocks, including Netflix, which reports next Wednesday.

Shares of the streaming giant Netflix rallied on Friday after Citigroup upgraded the stock, citing its content lineup and global growth as catalysts. "Fast Money" trader Guy Adami said he's long Netflix.

"Now I believe that $440 is your pivot. It obviously exploded through that today… I think it is ready for the next leg higher," Adami said. "I think you have a very well defined risk, reward trade."

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When it comes to trading the media stock, he says investors should "stay long against $440."

"Fast Money" trader Steve Grasso said he thinks the stock is ultimately heading to $500 a share, although he sees it facing resistance around $486.

"Content is king...people are viewing things in a total different manner," Grasso said. "I think you're going to see another price increase that's going to help. People might be negative on it originally."

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

"Fast Money" trader Tim Seymour says shares of fellow content streaming provider Pandora may get a boost thanks to competitor Spotify's surprise valuation.

Investors have valued its Spotify at about $8.4 billion, according a Dow Jones report, as it plans to raise some $400 million in funding. That values the firm at more than double Pandora's current market cap of $3.6 billion.

"The knee-jerk [reaction] is going to take the stock higher,"Adami said.

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Turning to the Internet search sector, the tech giant Yahoo lost one of its top executives, Mike Kerns, on Friday and some "Fast Money" Traders said it was a cause for concern.

"I think that the catalyst for upside profitability in the name have sort of evaporated. Everyone was playing it as the Alibaba trade. At this point i think you gotta stay clear of the name," Seymour said.

"Fast Money" trader Brian Kelly echoed his sentiments.

"You buy Alibaba as opposed to Yahoo if you want to have that exposure," Kelly said. "If there was really some value in Yahoo i think it would be trading much higher, so it concerns me."

Disclosures:

Tim Seymour is long T, BAC, C, DIS, XOM, F, GE, GM, GOOGL, INTC, FXI, SUNE, Tim's firm is long BABA, BIDU, CHL, MCD, NKE, NOK, SINA, SBUX, WB.

Steve Grasso is long AAPL, EVGN, MJNA, PFE, T, TWTR, GDX, his firm is long AMZN, NE, OXY, VALE, RIG, NEM, his kids own EFG, EFA, EWJ, IJR, SPY.

Brian Kelly is long BTC=, US Dollar, GLD, EEM, CTRL calls, GSG, BBRY, SPY puts, TLT, he is short Yuan.

Guy Adami is long CELG, EXAS, INTC, Guy Adami's wife, Linda Snow, works at Merck.