The 3 Best Social Media Stocks to Buy in April 2024

Stocks to buy

Social media stocks are in focus this year, with political ad spending expected to skyrocket and the broader market implications of a TikTok ban. With all the positive momentum behind the sector, betting on the best social media stocks to buy in April would be prudent.

Forecasts point to an impressive 30% increase in political ad revenues this year, totaling $12.32 billion. Moreover, the social media sphere is poised for a major financial influx, with roughly $3.45 billion, or 28% of the total, expected to be spent on online platforms. Moreover, the possibility of a TikTok ban by Congress shifts the competitive landscape in favor of American social media companies, presenting lucrative investment opportunities. Additionally, with social media giants leveraging the power of AI to refine their strategies, savvy investors have a prime opportunity to invest in the top social media stocks.

Reddit (RDDT)

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Reddit (NYSE:RDDT) stands out in the social media space not just for its vibrant platform but also as a burgeoning investment opportunity. Over the years, the platform has evolved into a “community of communities,” boasting a growing and engaged user base of 76 million daily active users at the end of last year.

The Reddit initial public offering (IPO) has been one of the hottest topics in the tech stocks arena this year, and it has proven to be a massive success so far. RDDT stock is still trading over 40% higher than its IPO price of $34 despite shedding considerable value in the past weeks. Nevertheless, those with a long-term horizon should be able to handle sharp pullbacks soon.

Furthermore, Reddit demonstrated promising financial growth last year, with revenues surging over 21% in 2023 to $804 million. Its fourth quarter (Q4) was particularly notable, with sales climbing an impressive 24% year-over-year (YOY) to roughly $250 million, resulting in a modest GAAP operating profit of $3 million. These figures reflect significant YOY improvements and signal a positive trend as Reddit continues to refine its monetization strategies.

Pinterest (PINS)

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Pinterest (NYSE:PINS) is reclaiming its former glory as it finally finds its footing in the post-pandemic world through strategic adjustments and innovations. The pandemic-led headwinds led to a substantial dip in user growth, impacting the advertising scene. However, recent performances have shown that it is firmly on the comeback trail. In the last four quarters, the company has beaten top-and-bottom-line estimates across both lines on three occasions.

Furthermore, its most recent quarterly showed an 11% bump in monthly active users, reaching 498 million while outperforming analyst expectations. Moreover, its future is gleaming with promise, with first-quarter sales for 2024 to fall in the $690 million and $705 million range, an impressive 15% to 17% jump on a YOY basis. Moreover, announcing a strategic partnership with Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) fuels its momentum further, highlighting its ambition to evolve into an eCommerce powerhouse. Additionally, by harnessing its massive user base for third-party online advertisements, Pinterest is targeting a major leap in its business model.

Nextdoor (KIND)

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Nextdoor Holdings (NYSE:KIND) is a unique social media platform that effectively connects neighborhoods worldwide. It went public in late 2021, and its stock price reached an all-time high of $13.50, a far cry from its current penny stock status.

The KIND stock has lagged behind the broader market over the past few years, operating in a far-from-ideal business environment. The past two years have been marked by robust inflation rates and post-pandemic headwinds, which weighed down social media stocks. Given Nextdoor’s status as a small-cap tech business and its lack of profitability, it was certain to lose value.

However, 2023 was a different story for its business, as it wrapped up the year with another comfortable top-and-bottom-line beat. Revenues were up $55.56 million, representing a 4.3% improvement YOY, with Weekly Active Users (WAU) up a healthy 5% bump YOY. As we advance, it anticipates revenue growth to outpace that of 2023, with a significant improvement in its adjusted EBITDA margins. Moreover, with social media splitting into specialized niches away from top platforms, KIND is a stock well-positioned to benefit from the evolving landscape.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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