The 3 Best Social Media Stocks to Buy in August 2024

Stocks to buy

As we approach November 5 and U.S. presidential election, social media stocks are on everyone’s mind.

Social media stocks are becoming more relevant in debates and conjecture on the next election between former President Donald Trump and Vice President Kamala Harris.

Additionally, well-known social media stocks are attracting attention from internet expansion, corporate collaboration, and video demand. Forecasting a 17% compound annual growth rate (CAGR) from $81.42 billion in 2024, global social media is expected to reach $179.22 billion by 2029.

The U.S. and Canada help to explain why the North American social media market is among the biggest. It’s estimated to propel 40% of the worldwide social media market expansion between 2023 and 2027.

Mass populations in China, India, and Indonesia help Asia-Pacific become the fastest-growing social media market. WeChat and TikHub are leading the market expansion in this vast industry.

The 2024 elections could increase social media political ad spending. With U.S. social media political advertising expected to surpass $2 billion, eMarketer indicates its growing importance in reaching voters.

Let’s look at three buy-rated social media firms with double-digit upsides, likely to get a boost from the secular growth and political events impacting the industry.

Microsoft (MSFT)

Source: NYCStock / Shutterstock.com

Although the software behemoth Microsoft (NASDAQ:MSFT) is praised for switching from desktop to cloud computing and AI, its brand is also very prominent among social media stocks.

New tools and improvements at Microsoft Build 2024 let app creators use AI. Azure upgrades, GitHub Copilot extensions, and Copilot Studio facilitate the development of AI assistants. These technologies support digital ecosystem-integrated applications and ease development by means of social media.

Concurrently, nearly 141 million LinkedIn members log in daily—16.2% of 875 million total. With an average user duration of eight minutes, LinkedIn has 1.7 billion daily views.

A business-to-business powerhouse, 97% of marketers utilize LinkedIn for content marketing. Lead generation relies mostly on social media, as 80% of B2B contacts start from it.

Microsoft has also improved its advertising tool, including AI-powered asset recommendations for video ads and more general LinkedIn targeting of different sectors.

MSFT is a “strong buy” on 32 analyst evaluations. Given the tremendous demand for MSFT’s AI technologies, the stock’s 12-month upside, which averages $503.19, is not difficult to reach.

Meta Platforms (META)

Source: Ascannio / Shutterstock.com

Meta Platforms‘ (NASDAQ:META) second-quarter 2024 sales rose 22.1% to $39.1 billion. Earnings per share increased 73% to $5.16 from the same time last year. Meta’s collection of applications has 3.3 billion daily active users, up 7%. Meta’s impressive result beat analysts’ $38.3 billion sales and $4.73 EPS projections. The upside for META stock is a potential 11%.

Besides, Meta continues to spend substantially on AI. According to estimates, Meta AI will become widely used worldwide by the end of the year. Meta developed Segment Anything Model 2, which can find target components in images and movies, and AI Studio, a tool for building original AI chatbots without technological knowledge. Furthermore, Meta’s open-source AI models encourage creativity.

Meta also uses cutting-edge AI to enhance ad targeting and user experience, enabling revenue opportunities in numerous areas, including tailored ad design and brand message.

Finally, up from $35 billion to $40 billion, Meta’s 2024 capital expenditure plan now runs $37 billion to $40 billion. Significant AI research and commercialization have produced these advances. As Meta develops its AI and technology, Susan Li, its chief financial officer, foresees a significant increase in capital expenditures through 2025, helping enhance Meta’s products.

Pinterest (PINS)

Source: Ink Drop / shutterstock

Pinterest (NYSE:PINS) offers new algorithms to enhance old ones. A portion of the home feed now includes video pins. Content authors rearrange their pins for new reach pins.

Creative Studio, launched by Pinterest, lets firms generate lifestyle photos for their goods. With this option, companies may add their Pin link, pick questions, and obtain unique background photographs.

Pinterest is becoming more shoppable by using mobile deep links and direct connections to guide visitors from discovery to purchase.

Additionally, Pinterest integrated Salesforce (NYSE:CRM) Commerce Cloud and Adobe (NASDAQ:ADBE) Commerce native apps. These partnerships simplify Pinterest eCommerce by letting merchants manage their product catalogs in these applications.

Engaging users and strong monetization helped Pinterest grow 21% to $854 million in Q2 2024. The company has 522 million platform monthly active users worldwide, up 12% year over year. Pinterest earned 29 cents per share, above analysts’ 28-cent forecast.

Next year, Pinterest’s earnings will rise 61% to 71 cents per share, according to estimates; the stock’s upside is also 61%.

On the date of publication, Faizan 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.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

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