Social media stocks have been on the rise in the stock market over the past few years. After all, it has become an integral part of our lives. Certainly, the coronavirus pandemic has accelerated the growth in social media as traditional in-person social activities were disrupted. Yet, even before the pandemic, the industry has been thriving. According to Statista, there are over 3.6 billion people across the globe who utilize social media. And the number is still increasing.
In this era, we have people with full-time jobs on social media platforms such as Amazon’s (NASDAQ: AMZN) Twitch and Alphabet’s (NASDAQ: GOOGL) Youtube. Furthermore, if you’re running a business or company, it also provides a great opportunity to build customer relations by gathering inputs, answering questions, and listening to their feedback. This would then lead to a better understanding of what’s working and what’s not. Therefore, it is only natural that investors will be looking for top social media stocks to buy. With all these in mind, here’s a list of top social media stocks in the stock market today.
- Pinterest Inc (NYSE: PINS)
- Snap Inc (NYSE: SNAP)
- Twitter Inc (NYSE: TWTR)
- Facebook, Inc (NASDAQ: FB)
Pinterest Inc
Let us kick start the list with the visual social media company, Pinterest. Unlike other social media platforms such as Facebook and Twitter, the company focuses on hobbies and ideas with its visual discovery platform. Its visual discovery platform acts like a virtual Pinboard, where people use pins to share their ideas, save images and videos on the Web and organize their favorite recipes. Not only that, but it also offers online marketing services to brands that connect them with people on the basis of their interests.
Last week, Pinterest announced the expansion of its shopping features to Australia, Canada, France, and Germany. The company offers its users the opportunity to shop from Pins, on boards, from search, and from the inspiration they find using Lens camera search. Furthermore, users will be able to gain inspiration from Shopping spotlights, which showcase recommendations and trends from influential publishers.
Also, shopping on Pinterest is even better than ever for advertisers. Allowing people the time to consider and enjoy shopping like they can on Pinterest would likely result in significantly higher spending. When advertisers add shopping ads to the mix, they drive three times the conversion and sales lift, and twice the positive incremental return on ad spend. So, it is safe to say that this feature would be a key factor in the growth of the company long-term. With that in mind, would you invest in PINS stock as it shows signs of recovery over the past month?
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Snap Inc
Snap is essentially a camera company. It is most commonly known for its camera app, Snapchat. The company believes that reinventing the camera would represent the greatest opportunity to improve communications. With the company slowly growing in popularity and an actively growing user base, SNAP stock has climbed by almost 200% over the past year.
Back in May, the company finally announced the next generation of Spectacles, its first pair of glasses that bring augmented reality (AR) to life. These are lightweight display glasses, made for creators to overlay their Lenses directly onto the world. In addition, it also announced new augmented reality tools and camera experiences for its users. AR has become core to the Snapchat experience, where the majority of the Snapchat community engages with augmented reality to communicate and learn on a daily basis.
Fundamentally, the company is also very strong. Its recent first-quarter earnings report showed impressive numbers. Snap boasted revenue of $770 million, up by 66% year-over-year. Its daily active users also grew by 22% to 280 million. This marks the company’s highest ever growth rates in both areas over the past three years. All these go to show that the company’s relentless product innovation is bearing fruit. All things considered, do you think SNAP stock would be a good investment?
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Twitter Inc
Twitter operates as a platform for public self-expression and conversation in real-time. It allows users to consume, create, distribute, and discover content. Twitter also provides promoted products and services, such as promoted tweets, promoted accounts, and promoted trends, which enable advertisers to promote their brands, products, and services. TWTR stock has risen by more than 70% over the past year.
In its first-quarter financial report, the company reported a 20% year-over-year growth in monetizable daily active usage. Revenue for the quarter was up by 28% year-over-year, coming in at $1.04 billion. Net income was $68 million, representing a net margin of 7%. This compares to a net loss of $8 million for the same period last year. This is a solid start to the year for the company as people turn to Twitter to check on what’s happening and help them to find their interests more quickly.
It is also noteworthy that Twitter announced the appointment of Mimi Alemayehou to the company’s Board of Directors last week. Ms. Alemayehou brings to Twitter’s board more than 20 years of investment and finance experience across emerging markets, with a strong focus on Africa. On top of the experience that she brings, it also boosts the diversity drive that the company is focusing on. Given the endless opportunities that lie ahead, would you add TWTR stock to your portfolio?
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Facebook, Inc
Lastly, we have the social media giant Facebook. The company develops products that allow people to connect and share with friends and family through a variety of devices. Its products would include Facebook, Instagram, Messenger, and Whatsapp. You are likely on one of these platforms if not all. Since it was founded in 2004, it is now one of the largest companies in the world. In fact, it may soon join the $1 trillion dollar club.
Since the market crashed back in March 2020, FB stock has been trending upwards. It is worth noting that it has more than doubled in price since the crash. From its most recent quarterly report, its earnings came in at $3.3 per share. Revenue for the quarter was $26.17 billion, up by 48%. The social media giant attributed the significant increase in revenue to a 30% year-over-year increase in the average price per ad and a 12% increase in the number of ads delivered.
When assessing a predominantly social media company, its daily active users (DAUs) is a very important number. Facebook averaged 1.88 billion DAUs on its platform from its most recent report. So is it safe to assume that Facebook’s dominance in the social media space is here to stay? If you believe so, could FB stock be a viable investment now?
