Bet on these top social media stocks to buy on the edge and expect big upside ahead.
There has been a lot of movement in social media stocks over the past few months. reddit (New York Stock Exchange:RDDT) has been widely reported, while former President Trump’s comments have been controversial. Trump Media & Technology Group (NASDAQ:DJT) has finally completed its merger with Digital World Acquisition Corp., a special acquisition vehicle. Additionally, we’ve recently seen major social media giants post even more solid quarterly growth in both categories. So it’s hard to take social stocks out of the equation as buys.
At the center of the conversation is artificial intelligence.A.I.) Over the past year, in fact, even without it, social media sites continue to be an incredibly profitable investment. AI increases engagement and time spent on top social media platforms. More time spent means more opportunities for social media companies to squeeze more out of their user base. With that in mind, here are three social media stocks that stand out above the rest.
Metaplatform (META)
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No list of social media stocks to buy would be complete without it meta platform (NASDAQ:meta). It is behind the largest social media platform of all time and has effectively shaped the modern social media landscape. The company’s family of apps, including Facebook, Instagram, WhatsApp, and Messenger, boasts an impressive combined user base of 3.98 billion people.
Last year was a big year for Meta’s business and stock. Meta has made significant inroads in the field of AI while streamlining operations to reduce costs. The results were staggering, with free cash flow increasing by more than 50% for him and sales and bottom lines increasing significantly in each of the four quarters.
The company recently announced impressive first quarter (Q1) results, beating analyst expectations in both areas. Revenue rose about 27% to $36.46 billion, exceeding expectations by $231.9 million. Additionally, earnings per share (EPS) was $4.71, 35 cents more than expected. However, the stock price plummeted following the announcement of cautious forward guidance. The market has gotten this wrong, and now is the perfect time to scoop up stocks on a downturn.
Pinterest (PIN)
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image-based social media platform pinterest (New York Stock Exchange:pin) is now on fire. Shares rose by double digits for him following the release of first-quarter results, which came in below expectations on both lines. Additionally, his monthly user base exceeded $500 million, an all-time high for the business.
Pinterest’s first quarter revenue grew a solid 23% to reach an impressive $740 million. This significantly exceeded analysts’ expectations by $40 million. Additionally, the company’s strategic cost reduction of 6% significantly reduced its operating loss from $243.7 million to $54.4 million. Average revenue per user (ARPU) also recorded a healthy 10% increase globally, reflecting the platform’s strong performance in all regions.
These impressive results are reminiscent of Pinterest’s peak popularity during the pandemic. In fact, the first quarter results showed “the fastest user and revenue growth since 2021,” according to CEO Bill Ready.
PINS stock soared last year, growing nearly 90%, and is up 16% this month despite a broader market pullback. Despite the eye-catching rally, analysts expect the stock to rise 6% from the current price based on average price targets.
Tencent Holdings (TCEHY)
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tencent holdings (OTCMKTS:Chehi) is one of the major social media players in China, leveraging the power of the robust super app WeChat. With an impressive 1.3 billion monthly active users, WeChat has spread its tentacles into a variety of technology fields including fintech, gaming, telemedicine, and now AI. The evolution of the app has enabled Tencent to effectively enhance user engagement across its platforms. Furthermore, despite the looming threat of regulatory scrutiny, the company has taken safeguards that effectively minimize the risk of devastating penalties from the Chinese government.
Although recent performance has been marred by headwinds in the Chinese market, the company has managed to maintain decent growth while maintaining a profitable position. Additionally, the company announced a dynamic Hunyuan AI model, which could be a major growth driver for the company in the future.
TCEHY stock was relatively quiet compared to other tech companies in 2023, but it has regained some ground this year. The stock price has risen about 25% year-to-date (year-to-date), and it is likely to rise further in the future.
On the date of publication, Muslim Farooq did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are subject to InvestorPlace.com Publishing Guidelines..
