Social media has become ingrained in everything we do, whether it’s a professional or personal life, with SmartInsights saying “53.5% of the world population uses social media” now. Most of us, myself included, probably spend way too much time on these apps. And all of that time leads to more and more clicks. We see them as “social media” companies but it’s really all about the ads.
1. Facebook (for now)
From the Facebook Platform and Messenger, as well as Instagram and WhatsApp, it has the trifecta for daily communication with work, friends, and family.
And it’s still growing. Revenue for Facebook (NASDAQ: FB) grew over 55% from $18.7 billion in Q2 2020 to $29 billion in Q2 2021. Net income rose over 100% YoY from $5.1 billion in Q2 2020 to $10.4 billion in Q2 2023.
Facebook succeeded where others failed before it, building the most successful social media platform in the world and now it’s looking to beat the odds again, diverging into a new industry in the metaverse under a brand new name. Facebook can leverage its current users and is in a well-capitalized position to take control of this new sector. For more on its Growth, check out Facebook Q3 Earnings: What To Expect?
Snapchat (NYSE: SNAP) says it’s a “camera company” but I think it’s being humble. To me, it’s a combination of streaming, instant messaging, and AR in one platform. It has just launched Snap Originals too — these are video stories from A-list celebrities on their personal lives and important social issues. Despite skeptics early in its public debut, Snapchat has grown into a $120 billion valuation this month, up over 200% since IPO, and up over 1200% from its 2018 lows. Snap has more than tripled its revenue from 2017-2020, and all the while is steadily moving towards achieving profitability. Expectations were high for its first billion-dollar quarter in Q3 of 2021, expected to bring in $1.07 billion in revenue and daily active users to hit 301 million.
But POP it goes. Snapchat fell 20% in pre-market after its Q3 earnings on October 21. This could mark a good entry point for new investors if you believe this is just a short-term oversight. For more on that, have a look at our thoughts on the Snapchat Q3 earnings report here.
Pinterest (NYSE: PINS) is a visual discovery engine for ideas — everything from home decor and cooking, to memes and camping. Pinterest has reached profitability in recent quarters, bringing in $48 million in net income for Q2 2021 versus a loss of $242 million in Q2 2020. Global revenue has grown 125% year-on-year (YoY). Average revenue saw substantial growth as well, up 103% globally, and 163% internationally (i.e. countries outside the U.S.).
But the latest news rumored on October 20 was that PayPal had made a $45 billion offer to acquire the company. Experts believe the acquisition will provide synergies within PayPal’s app and it can be integrated with its “deal business” Honey. Honey is an AI that tracks retailer discounts which can give customers better deals, but it can also help PayPal determine future spending patterns to personalize what its users like so they can show similar deals than in the future.
So, who takes the cake?
Well, it depends. These are all great growth stories, and Facebook has cemented itself as an overall stock market leader. The question really comes down to what you think has the most potential ahead of itself; Facebook and the metaverse, Snapchat and AR, or Pinterest and Payments.
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Financial Writer at MyWallSt
David's favorite stock is Google. He's a daily user of its YouTube platform, where you can learn or find something brand new at the touch of a button. He believes the company will continue to grow for many years to come.