As we come to a close of this trading week, social media stocks appear to be in focus. Accordingly, several factors would be driving investor interest in this sector of the stock market today. For starters, social media stocks have and continue to thrive amidst the current pandemic. This would be the case as consumers in some parts of the world remain homebound due to a resurgence in coronavirus cases. To keep themselves occupied during such times, most would turn to social media. After all, social media serves as a way to connect with friends and loved ones virtually. If anything, this would be the ideal means of doing so amidst a global health crisis.
Not to mention, the rising delta COVID variant continues to wreak havoc across the globe. According to the Director of the Centers for Disease Control and Prevention, Rochelle Walensky, it is one of the most infectious respiratory diseases to date. In turn, this could further incentivize lockdown measures by governments to prevent the spread of the disease. As such, most would argue that social media stocks could have more room to run in the stock market now.
At the same time, we are currently looking at a rather upbeat earnings season now. Coming off the heels of a red-hot economic recovery, many of the biggest names in tech are seeing solid figures across the board. With the likes of Facebook (NASDAQ: FB) and Google (NASDAQ: GOOGL) reporting earnings next week, things could be heating up. Regardless, while investors weigh out their options, having a healthy mix of reopening and pandemic stocks could be the play. If you are looking for the top social media stocks to invest in now, here are three to watch this month.
Top Social Media Stocks To Buy [Or Sell] Now
Starting us off today is Twitter Inc. In brief, the California-based social media giant primarily operates via its proprietary platform of the same name. On this platform, Twitter offers microblogging and social networking services. In detail, Twitter provides users with an almost instant connection to news around the world. Given how quickly people can provide updates and post, trends on the platform are often linked to real-world occurrences. Thanks to the company’s latest quarterly earnings report, TWTR stock seems to be taking center stage now.
Notably, Twitter posted earnings per share of $0.20 on revenue of $1.19 billion, crushing Wall Street’s estimates across the board. For comparison, consensus estimates were looking at earnings of $0.07 on revenue of $1.07 billion. On top of that, Twitter also now boasts over 206 million average monetizable daily active users (DAU). All of this adds up to total revenue growth of 74% year-over-year. According to analysts, this marks Twitter’s fastest revenue growth since 2014. CFO Ned Segal cited the company’s direct response and brand products, and updated ad formats as primary growth drivers. Furthermore, Segal also noted that Twitter’s growing small and medium-sized business segment continues to grow as well.
Overall, Twitter appears to be firing on all cylinders now. Just this quarter, the company launched numerous new features on its app, including a paid subscription service. Moreover, it is branching into the audio chatroom and fintech markets with its Spaces and Tip Jar services respectively. Would this make TWTR stock a top social media stock to watch right now?Source: TD Ameritrade TOS
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Another big name in the social media industry making headlines now would be Snap Inc. The social media camera app developer offers users a more visual-based social networking experience via its flagship Snapchat app. Supporting Snapchat, the company also develops and supplements Spectacles and Bitmoji. On one hand, Spectacles is an augmented reality (AR) device that works with Snapchat allowing for more interactive experiences. On the other hand, Bitmoji allows users to create their own personalized digital avatars which appear on Snapchat emojis. Given the unique camera-focused appeal of Snap’s social network offering, consumers and investors alike could be tuning in now.
Evidently, SNAP stock is currently sitting on gains of over 180% in the past year. Similar to our previous entry, Snap also reported solid figures in its second-quarter fiscal yesterday. More importantly, the company saw its total revenue for the quarter skyrocket by 116% year-over-year to $982 million. If that wasn’t enough, the company now boasts a DAU count of 293 million, marking a sizable 23% year-over-year increase. Generally, CEO Evan Spiegel believes that these figures indicate the “broad-based strength” of Snap’s business. According to Spiegel, the company grew its revenue and DAU at the highest rate to date.
Adding to its impressive earnings report, Snap continues to expand its operations now. As of this week, the company is now working with Verishop, a digital shopping platform operator. Now, the duo is currently operating the Verishop Mini, a “curated shopping experience” that is exclusive to the Snapchat smartphone app. All in all, Snapchat seems to be kicking into high gear now, and it could be a good stock to add to your radar for potential long-term growth.Source: TD Ameritrade TOS
Following that, we will be taking a look at Pinterest Inc. In a nutshell, the company mainly operates as an image-sharing and social media service. A key feature of its platform would be its “pinboards”. The likes of which serve to distinguish Pinterest from its social media peers now. Through these pinboards, Pinterest users can save, design, share, and discover new ideas and concepts across the internet in picture form. By and large, all this would serve to help people conceptualize ideas and plans, a service that appealed to many throughout the pandemic.
Likewise, investors appear to be keen on PINS stock as well. The company’s shares are now up by over 195% in the past year. Could PINS stock be worth watching ahead of its second-quarter earnings next week? If anything, Wall Street analysts appear to believe so. As it stands, consensus estimates suggest that Pinterest could post total revenue of $560.73 million, marking a 105.8% year-over-year surge. Additionally, analysts also predict an earning per share jump of over 280% over the same period.
For the most part, these estimates would seem rather bold to the uninitiated. However, Pinterest continues to grow its revenue streams and optimize its existing services. The company is now leveraging the beauty items search trends on its platform to create interactive e-commerce experiences for users. Namely, Pinterest employs a combination of artificial intelligence (AI) and AR in its Try On service. Through Try On, users can try on makeup digitally using their phone cameras. The AI recommends products and the AR layers on makeup over the individual’s face. With all of this in mind, will you be watching PINS stock?Source: TD Ameritrade TOS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.