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Investing in Social Media Titans: Unveiling 3 Top Stocks for Your Q2 Radar

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Amidst the fervent debates swirling around TikTok and X, the indelible mark of social media on the modern zeitgeist stands staggeringly evident.

Of course, the discourse often gravitates towards content and the potential drawbacks of technology. Nonetheless, from a financial vantage point, social media platforms serve as lucrative investment havens helmed by prosperous corporations. Projections indicate that advertising spend on such platforms is poised to approach the $220 billion mark by 2024, as per Statista data.

Furthermore, the impending surge in marketing spending engendered by the forthcoming presidential election dangles like a ready fruit, with ad expenditures expected to escalate by 30% from 2020 levels, reaching an astronomical $12.32 billion this year. Of this staggering sum, a robust 28%, equivalent to $3.45 billion, is earmarked for online advertising.

Should Congress decide to outlaw the Chinese social media behemoth TikTok nationwide, American social media enterprises stand to reap substantial benefits. TikTok, a goliath in the field, boasts a global user base of 1.7 billion individuals. Let’s now delve into three robust social media stocks deserving a spot on your watchlist this second quarter.

Embracing the Reddit Revolution: RDDT

Reddit (RDDT) paper logo lies with envelope full of dollar bills and smartphone. Reddit IPO

Source: Mehaniq / Shutterstock.com

A mention of social media equities in the current landscape would be remiss without acknowledging the mammoth in the room – Reddit (NYSE: RDDT).

Granted, the company is not immune to risks, with RDDT currently in the red and exhibiting signs of volatility. It’s undergoing a 9% dip on the day of scripting this narrative. Nevertheless, by most metrics, Reddit’s initial public offering (IPO) has struck a chord of success, with shares soaring a whopping 74% above their debut price of $34.

Going forward, the road to profitability will be crucial for Reddit and any subsequent upticks in its share value. Presently, investors seem fixated on the company’s robust growth trajectory, underpinned by a base of 73 million daily active users on the platform – a number that is only on the rise. This escalating user base is poised to fuel advertising revenues, acting as Reddit’s primary cash cow.

Broader in scope, the RDDT IPO serves as a palpable symbol of investors’ renewed appetite for fresh listings, especially emanating from the epics of the tech industry.

Unveiling the Dominance of Meta Platforms: META

In this photo illustration the Meta logo seen displayed on a smartphone and in the background the Facebook logo

Source: rafapress / Shutterstock.com

Indeed, Meta Platforms’ (NASDAQ: META) ascendance grabs eyeballs for its prowess in artificial intelligence (AI) offerings and virtual reality headsets. However, the bedrock of its triumph continues to emanate from its social media dominions, encompassing Facebook, Instagram, and WhatsApp.

META has surged by a formidable 42% this year, riding high on escalating user counts and burgeoning traction in the advertising realm over recent quarters.

Moreover, the company witnessed a commendable 25% revenue upswing in the fourth quarter of 2023 compared to the previous year, marking the most rapid growth rate since mid-2021, amid the resurgence of the online advertising ecosystem post the Covid-19 aftermath.

Peering into the future, Meta Platforms’ stock stands to glean benefits if the U.S. indeed imposes a prohibition on the Chinese social media juggernaut TikTok.

Meta’s short-video platform Reels awaits in the wings, ready to stage the spotlight should TikTok be ousted from U.S. devices. The advertising revenues stemming from Reels have displayed an upward trajectory over the past half-year and could witness a substantial surge should American patrons need to scout for an alternative avenue catering to their TikTok cravings.

The Resurgence of Pinterest: PINS

Pinterest logo. PINS stock.

Source: Ink Drop / shutterstock

Over the past year, Pinterest (NYSE: PINS) has been navigating a path of resurgence, with its stock marking a 24% uptick in the last 12 months, signaling a gradual amelioration in its financial performance.

Furthermore, the platform has deftly pivoted its operational tenets post the pandemic era, as denizens emerged from their Covid-19-induced hibernation. In the throes of February this year, Pinterest unveiled a noteworthy surge in monthly active users on its social platform, with a commendable 11% uptick in Q4 2023, soaring to 498 million – surpassing prognostications on Wall Street.

Looking forth, Pinterest has charted a revenue forecast of $690 million to $705 million for the ongoing first quarter of 2024, marking an annualized growth trajectory of 15% to 17%. Furthermore, the company unveiled a pioneering alliance with Google’s parent entity, Alphabet (NASDAQ: GOOG/GOOGL), with a focus on third-party online advertising, heralding a potential revenue fillip for Pinterest. Presently, PINS stock has surged by a remarkable 42% since its 2019 IPO.

On the day of commencing this missive, Joel Baglole held a long position in GOOGL. The expressions articulated in this manuscript solely represent the author’s sentiments and adhere to the InvestorPlace.com Publishing Guidelines.

Having embossed a legacy spanning 20 years in the domain of business journalism, Joel Baglole is a luminary in his own right. His past stint as a staff reporter at The Wall Street Journal, juxtaposed with contributions to illustrious publications like The Washington Post and Toronto Star, in addition to financial platforms such as The Motley Fool and Investopedia, underscore his peerless acumen.

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