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Seen the TikTok vs. X buzz? Social media’s clout is undeniable, shaping societal norms. On the financial front, social media platforms are a lucrative investment domain overseen by prosperous firms.
By 2024, social media ad spending is on track to hit nearly $220 billion, per Statista. As political ads surge due to the upcoming U.S. presidential elections, a 30% spike is projected this year, reaching $12.32 billion—$3.45 billion (28%) allotted to online ads.
If Congress flags TikTok for a nationwide ban, American social media titans could thrive. TikTok, with 1.7 billion global users, is in the limelight. Here, we unravel three stellar social media stocks for your Q2 watchlist.
Reddit (RDDT)
Source: Mehaniq / Shutterstock.com
Discuss social media stocks and Reddit, and it’s hard not to spotlight the room’s elephant: Reddit (NYSE:RDDT).
Undeniably, RDDT carries risks—unprofitable and with volatile shares, down 9% at the time of writing. Regardless, its IPO proved successful, trading 74% above its $34 debut.
Reddit’s journey to profitability is pivotal for stock growth. Presently, focus lies on robust growth—73 million daily active users and a climbing user base driving ad revenue, the prime income source.
Overall, RDDT’s IPO underscores investor zeal for fresh listings, especially in tech.
Meta Platforms (META)
Source: rafapress / Shutterstock.com
Meta Platforms (NASDAQ:META) garners attention for AI and VR, though social media—Facebook, Instagram, and WhatsApp—remains its core revenue source.
META soars 42% YTD boosted by user growth and ad site traction. Q4 2023 witnessed a 25% revenue surge, the quickest since mid-2021 post-Covid as online ads rebounded.
A prospective TikTok ban could elevate Meta stock. Reels, its short-video venue, stands ready to capture displaced TikTokers. Reels’ ad revenue rise signifies TikTok users seek a backup.
Pinterest (PINS)
Source: Ink Drop / shutterstock
Pinterest (NYSE:PINS) stages a strong rebound—up 24% in 12 months, showcasing financial recovery.
Post-pandemic adjustments saw a surge in monthly active users in Q4 2023. Forecasting $690-$705 million Q1 2024 revenue signifies 15%-17% annual growth. The Alphabet (NASDAQ:GOOG/GOOGL) partnership aiming at third-party online ads bodes well.
PINS soared 42% post its 2019 IPO.
Joel Baglole, a 20-year business journalist, has a long position in GOOGL. Opinions expressed are solely those of the writer and adhere to InvestorPlace.com Publishing Guidelines.
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