Predicting the Outstanding Social Media Shares in 2025: Meta Platforms, Snap Inc., or Pinterest?
In the social media stock landscape of 2024, the trio of Meta Platforms (META), Pinterest (PINS), and Snap (SNAP) showed varying fortunes. Meta topped the charts with a whopping 68% increase, while Pinterest and Snap slid 18% and 34% respectively. As we step into 2025, let's analyze which of these three might outperform.
Meta Platforms (Meta 1.11%)
Meta's reign as the supreme commander of social media continues, thanks to heavy investments in its Facebook, Instagram, WhatsApp, and Threads platforms. Advertisers constantly seek Meta's extensive user base, which boasts nearly 3.3 billion active daily users. By leveraging advanced adtech solutions, Meta not only offers advertisers a massive and targeted audience but also generates considerable revenues.
Meta's impressive monetization strategy is demonstrated by its average revenue per user (ARPU) metrics, which amounted to $11.89 last quarter. Over the last 12 months, Meta has amassed an average of $46.35 per user.
In 2024, Meta also plunged headfirst into the world of artificial intelligence (AI) by developing Llama AI models. These tools help drive user engagement and improve ad effectiveness by providing better recommendations and ad targeting.
However, critics point out Meta's heavy spending on the Metaverse, with its Reality Lab segment registering an operating loss of $4.5 billion last quarter compared to the $19.1 billion operating gain from its apps.
Meta's Q3 earnings showed 19% revenue growth and 37% earnings per share (EPS) growth.
Pinterest (PINS)
Pinterest is a go-to platform for inspiration, featuring themes like home design, travel, fashion, and shopping. With a global user base of 537 million monthly active users, Pinterest has substantial potential.
The company's efforts to monetize its staggering userbase have resulted in a more shoppable platform, featuring in-app checkouts, merchant catalogs, and AI-powered recommendations. Recently, Pinterest launched Performance+ – an AI-driven automation tool to simplify campaign creation and improve return-on-investment for advertisers.
Collaborating with Amazon and Google, Pinterest is amplifying its international monetization efforts. With 300 million of its users based in the Rest of the World (RoW) category, further international monetization is a lucrative opportunity.
Pinterest's Q3 earnings showed 18% revenue growth, but investors were disappointed with forecasted Q4 revenue growth of between 15% and 17%, signaling a decelerating revenue growth trend.
Snap (SNAP)
Snap, the popular messaging app with 443 million active users, has demonstrated impressive footholds in international markets with 244 million users abroad. Specifically, Snap has achieved higher ARPU in international markets, making it a strong competitor in uncharted territories.
Snap's most recent innovation – a redesign focused on decluttering the platform – aims to bolster engagement and ad revenue. Initially testing with 10 million users, the new interface could drastically alter the app's approach to visual messaging, chatting, and short-form video entertainment, potentially rendering it more TikTok-like. The revamped Snapchat may face monetization challenges but has high rebound potential, especially if TikTok faces potential bans or is forced to divest in the US.
Last quarter, Snap recorded 15% revenue growth and a striking 229% growth in EBITDA.
Conclusion
In deciding which of these three social media stocks is best-positioned to outperform in 2025, it's essential to weigh the opportunities and risks presented by each company.
Meta, with its proven victory record, remains a safe bet. However, investors have their eyes on Pinterest due to the potential of better monetizing international markets.
Nonetheless, I believe Snap Inc. possesses the ultimate edge to lead the pack in 2025. In the face of 2024's disappointing year-end performance, Snap retains considerable value in its AR technology, strong brand engagement, and expanding subscription service. The upcoming redesign and TikTok's potential market shift could pitch Snap into a new league of growth, armed with formidable rebound potential.
- Investors are closely watching Meta's heavy investments in its Instagram platform, expecting it to yield significant returns in 2025, simplifying ad targeting and revenue generation.
- The potential of Pinterest's Performance+ tool to improve ad campaign creation and return on investment for advertisers could lead to better investing opportunities in the platform in the coming years.
- Examining Snap's Q3 earnings showing 15% revenue growth and a striking 229% growth in EBITDA, analysts argue that the upcoming redesign and TikTok's potential market shift could significantly boost the company's stock prices by 2025.
- As we look ahead to 2025, especially considering the social media landscape's growth potential, investing in stocks like Meta, Pinterest, and Snap requires a holistic approach, factoring in each company's strengths, weaknesses, and future growth prospects.
