StockTok: Supreme Court to take up TikTok case following CEO meeting with Trump

Welcome to “StockTok,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

SCOTUS TO WEIGH IN: In an order issued Wednesday, the Supreme Court announced it will hold oral arguments on January 10 on TikTok’s bid to invalidate the law requiring them to divest from their Chinese parent company or face being banned in the U.S. TikTok filed an emergency application asking the high court to delay a January 19 divest-or-ban deadline and the court opted to move the emergency appeal to its normal docket to immediately take up the case in full. This order comes after President-elect Donald Trump met with TikTok CEO Shou Zi Chew at Mar-a-Lago on Monday, the same day that the company asked the Supreme Court to block the law that could ban the app in the U.S., David Ingram and Vaughn Hillyard of NBC News wrote. Trump expressed having “a warm spot” for TikTok at a news conference earlier in the day, saying “we’ll take a look” at the app and a possible ban.

MASTERING MONETIZATION: Instagram will account for more than half of Meta Platform’s (META) U.S. advertising revenue in 2025, as the social media platform improves monetization of its products, Reuters reported, citing research from Emarketer. Instagram’s Reels competes with ByteDance’s TikTok and YouTube Shorts (GOOGL), and if a TikTok ban takes effect in the U.S., Reels and YouTube Shorts could become attractive alternatives for advertising, potentially boosting Instagram’s growth, the report noted. “Instagram is now a video-first platform, with users spending close to two-thirds of their Instagram time watching videos,” says Jasmine Enberg, principal analyst at Emarketer.

AI ARMS RACE: Microsoft (MSFT) bought twice as many of Nvidia’s (NVDA) flagship chips as its largest rivals in the U.S. and China this year, Tim Bradshaw and Stephen Morris of The Financial Times wrote. Analysts at Omdia, a technology consultant, have estimated Microsoft bought 485,000 “Hopper” chips this year, putting the company far ahead of Nvidia’s next biggest U.S. customer Meta, which bought 224,000 Hopper chips. Microsoft’s hoard of chips has given it an edge in the race to build next generation AI systems.

TIKTOK PROBE: The European Commission has opened formal proceedings against TikTok for a suspected breach of the Digital Services Act in relation to TikTok’s obligation to properly assess and mitigate systemic risks linked to election integrity, notably in the context of the recent Romanian presidential elections on 24 November. Commission President, Ursula von der Leyen, said: “We must protect our democracies from any kind of foreign interference. Whenever we suspect such interference, especially during elections, we have to act swiftly and firmly. Following serious indications that foreign actors interfered in the Romanian presidential elections by using TikTok, we are now thoroughly investigating whether TikTok has violated the Digital Services Act by failing to tackle such risks. It should be crystal clear that in the EU, all online platforms, including TikTok, must be held accountable.” The proceedings will focus on management of risks to elections or civic discourse, linked to the following areas: TikTok’s recommender systems, notably the risks linked to the coordinated inauthentic manipulation or automated exploitation of the service. TikTok’s policies on political advertisements and paid-for political content. The Commission will now carry out an in-depth investigation as a matter of priority.

IRELAND FINE: The Irish Data Protection Commission on Tuesday announced its final decisions following two inquiries into Meta Platforms Ireland. These own-volition inquiries were launched by the DPC following a personal data breach, which was reported by MPIL in September 2018. This data breach impacted approximately 29M Facebook accounts globally, of which approximately 3M were based in the EU/EEA. The categories of personal data affected included: user’s full name; email address; phone number; location; place of work; date of birth; religion; gender; posts on timelines; groups of which a user was a member; and children’s personal data. The breach arose from the exploitation by unauthorized third parties of user tokens on the Facebook platform. The breach was remedied by MPIL and its U.S. parent company shortly after its discovery. The decisions, which were made by the Commissioners for Data Protection, Dr. Des Hogan and Dale Sunderland, included a number of reprimands and an order to pay administrative fines totaling EUR 251M. DPC Deputy Commissioner Graham Doyle commented: “This enforcement action highlights how the failure to build in data protection requirements throughout the design and development cycle can expose individuals to very serious risks and harms, including a risk to the fundamental rights and freedoms of individuals. Facebook profiles can, and often do, contain information about matters such as religious or political beliefs, sexual life or orientation, and similar matters that a user may wish to disclose only in particular circumstances. By allowing unauthorized exposure of profile information, the vulnerabilities behind this breach caused a grave risk of misuse of these types of data.”

AUSTRALIA SETTLEMENT: The Australian Information Commissioner today agreed to a A$50M payment program as part of an enforceable undertaking received from Meta Platforms to settle civil penalty proceedings. The payment scheme will be open to eligible Australian Facebook users impacted by the Cambridge Analytica matter. The Commissioner alleged that the personal information of some Australian Facebook users was disclosed to the This is Your Digital Life app in breach of the Privacy Act 1988. The information was exposed to the risk of disclosure to Cambridge Analytica and other third parties, and risked being used for political profiling purposes. The agreement announced today follows a court-ordered mediation, which has been ongoing since February, as part of the Federal Court civil penalty proceedings the Commissioner commenced in March 2020. “Today’s settlement represents the largest ever payment dedicated to addressing concerns about the privacy of individuals in Australia,” Australian Information Commissioner Elizabeth Tydd said.

THREAD COUNT: Meta CEO Mark Zuckerberg said Threads now has more than 100M daily active users and more than 300M monthly active users.

NEW MONETIZATION PROGRAM: Snap (SNAP) stated in a company blog: “We’re excited to continue supporting creators and announce a new, unified Monetization Program which not only places ads within a creator’s Stories and now, longer Spotlight videos as well. With Spotlight viewership up 25% year-over-year, there is a unique and growing opportunity for creators to monetize this format in the same way they do with Stories. Beginning February 1, 2025, eligible creators will be able to monetize Spotlight videos longer than 1 minute. As part of the unified program, creators may be eligible for invitation… We remain committed to evolving and expanding the total rewards available to creators, from Snap’s Monetization Program to the Snap Star Collab Studio, and more.”

MORE SMART GLASSES FEATURES: In a new release on the Meta Quest Blog, the company said in part: “Whether you already own a pair or you’re hoping Santa drops a one down the chimney, Ray-Ban Meta glasses are the gift that keeps on giving. Right out of the box, they help you experience the world, share your POV, and capture the moments that matter, completely hands-free. And with regular software updates, they keep getting better over time. Since Connect, we’ve released several new features including reminders, the ability to use your voice to search and play content on Spotify and Amazon Music, Be My Eyes integration, adaptive volume, and the option to set Meta AI on your glasses to celebrity voices including Awkafina, John Cena, Keegan-Michael Key, and Kristen Bell under the US voice options, and Dame Judi Dench under the UK voice options. Starting today, we’ll begin rolling out the v11 software update, which makes your Ray-Ban Meta glasses more capable, useful, and fun than ever before. Make sure your glasses and Meta View app are updated to the latest versions. Let’s take a look at what’s new.”

SLIPPERY SLOPE: Meta is urging California’s attorney general to block OpenAI’s planned conversion to a for-profit company, arguing it would set a dangerous precedent of allowing startups to enjoy the advantages of nonprofit status until they are poised to become profitable, Jessica Toonkel, Keach Hagey, and Meghan Bobrowsky of The Wall Street Journal reported. In a letter, Meta wrote, “If OpenAI’s new business model is valid, non-profit investors would get the same for-profit upside as those who invest the conventional way in for-profit companies while also benefiting from tax write-offs bestowed by the government.”

TECH FOR TRUMP: Over the past week, Meta, Amazon (AMZN), and OpenAI’s Sam Altman have each donated $1M to support President-elect Donald Trump’s inaugural committee, Theodore Schleifer and David Yaffe-Bellany of The New York Times wrote. Additionally, Google CEO Sundar Pichai and founder Sergey Brin dined with Trump on Thursday while Apple (AAPL) CEO Tim Cook shared a meal with Trump on Friday. This was the week when many tech companies and their top executives decided to make donations and connections in order to get business done with Trump’s Washington.

TRUTH SOCIAL CEO TAPPED: President-elect Donald Trump appointed Truth Social (DJT) CEO Devin Nunes to lead the President’s Intelligence Advisory Board, which oversees the U.S. intelligence community. In a post, Trump said: “I am pleased to announce that I will appoint Truth Social CEO Devin Nunes as Chairman of the President’s Intelligence Advisory Board, which consists of distinguished citizens from outside of the Federal Government. While continuing his leadership of Trump Media & Technology Group, Devin will draw on his experience as former Chairman of the House Intelligence Committee, and his key role in exposing the Russia, Russia, Russia Hoax, to provide me with independent assessments of the effectiveness and propriety of the U.S. Intelligence Community’s activities. Congratulations Devin!”

AUSTRALIA LEVY: Australia is planning to introduce a levy on tech companies like Meta with more than $250M in local revenue in an effort to force them to pay publishers for journalism, after Meta quit an existing arrangement, The Financial Times’ Nic Fildes reported. The move is intended to encourage them to negotiate with the media industry over commercial deals, Fildes noted. Meta and Google struck deals in 2021 to pay Australian media companies more than $128M a year for use of their content, but Meta said this year it would stop paying media companies as part of a retreat from news feeds globally. The new measure could have implications for tech names in social media and search, including Meta, Google, Apple, LinkedIn and TikTok, according to the report.

PROTECTING MINORS: Attorney General Ken Paxton has launched investigations into Character.AI and fourteen other companies including Reddit (RDDT), Instagram, and Discord regarding their privacy and safety practices for minors pursuant to the Securing Children Online through Parental Empowerment Act and the Texas Data Privacy and Security Act, the AG announced.

ANALYST COMMENTARY: Morgan Stanley raised the firm’s price target on Zoom Communications (ZM) to $96 from $86 and reiterated an Equal Weight rating on the shares. Communication software had “disappointing performance for much of 2024,” but a second half rotation and focus on reacceleration potential helped some names, such as Twilio (TWLO), the analyst wrote in a 2025 outlook note for the group. Entering 2025, the space has broadened portfolios, but the firm argues that it will be the names with “accelerating growth stories or extreme FCF support that we think will find outperformance,” the analyst told investors.

JPMorgan increased its price target on Reddit to $142 from $110 and kept a Neutral rating on the shares. Despite continued strong share performance and select higher valuations, JPMorgan remains positive on the internet group into 2025, the analyst noted. The firm anticipates artificial intelligence to continue to dominate the investment narrative, but says the focus will shift more to agents and applications. JPMorgan expects AI-driven capex to increase as mega-caps move beyond some of the compute constraints of 2024

JPMorgan elevated the firm’s price target on Meta to $725 from $660 and maintained an Overweight rating on the shares. Despite continued strong share performance and select higher valuations, JPMorgan remains positive on the internet group into 2025, the analyst tells investors in a research note. The firm expects artificial intelligence to continue to dominate the investment narrative, but says the focus will shift more to agents and applications.

Truist boosted its price target on Meta Platforms to $700 from $650 and backed a Buy rating on the shares as part of a broader research note previewing Internet services for 2025. The firm noted that while its estimates for the stock remain unchanged, it is extending its discount cash flow model by an extra year to capture Meta’s higher growth prospects in the outer years as the company continues to grow faster for longer, the analyst said.

Morgan Stanley lowered the firm’s price target on Pinterest (PINS) to $35 from $37 and reaffirmed an Equal Weight rating on the shares. The company needs to durably maintain revenue growth in the mid to high teens, or possibly accelerate to the 20s, in order to be a consistent out-performer but its next few quarters face challenging comparisons that the firm sees holding back growth and more than offsetting micro-level innovation, the analyst told investors.