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Former president Donald Trump’s social media platform Truth Social (NASDAQ:DJT) attracted significant attention last week. Nonetheless, other social media stocks witnessed price hikes as well. The debate rages on whether the broader surge in social media stocks propelled Truth Social or if the spotlight on the new microblogging site piqued greater interest. Recently listed Reddit (NYSE:RDDT) also encountered gains and sustained its upward trajectory alongside peers.
The intensifying scrutiny prompts a fundamental query — is there an investment prospect within social media stocks? Truth Social and Reddit might face more volatile performance as newcomers before unveiling initial earnings reports. In the interim, several social media stocks that have had a longer stint on the public market could present opportunities.
Persistent legislative deliberations concerning a potential TikTok ban are injecting complexity into the social media arena. U.S. regulators have insisted on its detachment from its parent company, ByteDance. The realm is abuzz with conjecture about likely outcomes: which social media entity could profit from users in the event of an app prohibition, who might acquire TikTok, and if it would prove to be another industry contender upon divestiture.
Meta Platforms (META)
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Meta Platforms (NASDAQ:META) emerges as the prime selection in the social media stock panorama. It stands as the largest publicly traded social media enterprise, with a market capitalization surpassing $1 trillion. Recent publications have thrust the corporation into the limelight as one of the so-called “Magnificent Seven” stocks and for its strides in artificial intelligence (AI). The burgeoning interest in the metaverse furnishes supplementary context for the company’s enduring prospects.
Meta also boasts ownership of Instagram, a direct rival to TikTok. In the event of the exclusion of the Chinese-owned video-sharing app from the U.S. market, META is poised to garner the most benefits. TikTok reportedly amassed $16 billion in revenue in the U.S. last year. A TikTok ban could redirect billions in revenues towards META. Despite the absence of a ban, unfolding events revolving around TikTok might empower META to expand its market share.
Pinterest (PINS)
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Pinterest (NYSE:PINS), the image-sharing and social media platform, witnessed a surge in its stock price last week. Nevertheless, shares remain in negative terrain year to date (YTD). Last year, Pinterest grew its user base by 11%. Moreover, the company markedly curtailed losses through cost-saving initiatives. Its average revenue per user (ARPU), a pivotal performance metric, climbed by 1.2%, underscoring its monetization prowess.
Analysts opine that the company is in a robust position to fortify its financial performance. The consensus price target for the second contender in the social media stocks lineup averages $43.15. This denotes a potential upside of nearly 30% from current levels. Endowed with $2.5 billion in cash reserves, Pinterest possesses formidable liquidity to sustain the execution of its strategic imperatives. Market anticipations pinpoint a return to profitability by year-end for the social media platform.
Rumble (RUM)
Rumble Rising: The Underestimated Competitor Shaking Up Social Media
The Underestimated Player in the Game
Rumble, a video hosting company aiming to challenge Alphabet’s YouTube platform, has quietly been making waves in the social media landscape. Despite facing widening losses due to growing hosting expenses and content investments to allure viewers, Rumble’s stock price has been on a steady climb throughout 2024. Investors seem unfazed by the $29 million in negative profits, drawing comfort from Rumble’s substantial $218.3 million cash reserve.
A Steady Climb Amid Sector Surprises
Considered an underdog in the realm of social media stocks, Rumble has defied expectations with its upward trajectory. This success comes on the heels of DJT’s meteoric rise following its SPAC merger with Digital World Acquisition and subsequent Nasdaq listing. Rumble also garnered attention for potential involvement in the acquisition of TikTok, positioning itself as a key player in a consortium overseeing the management of the popular platform.
On the date of publication, Stavros Tousios did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
