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The TikTok Ripple: Who Stands to Gain in the Stock Market?
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The TikTok Ripple: Who Stands to Gain in the Stock Market?

Story Highlights

TikTok’s return to the U.S. sparks market ripple. Social media stocks such as Meta, Google, and Snap could gain from ongoing uncertainty and regulatory challenges.

As TikTok resumes its services in the U.S. after a brief shutdown, the ripple effect is felt across the stock market, with companies like Meta Platforms (META), Alphabet’s (GOOGL) Google, and Snap Inc. (SNAP) poised to benefit from the uncertainty surrounding the app. Despite its return, regulatory issues and concerns over control continue to create a volatile environment, opening the door for rivals to attract users and ad revenue.

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TikTok went dark on January 19, 2025, due to a law requiring its Chinese parent company, ByteDance, to sell its U.S. operations to protect user data. However, less than 24 hours later, President-elect Donald Trump announced plans to delay the ban, proposing a joint venture with 50% U.S. ownership.

Let’s understand the implications of TikTok’s return in more detail and how it affects various sectors.

Implications of TikTok’s Return

As TikTok makes its return to the U.S., the implications extend beyond the platform itself, affecting advertisers, competitors, and the broader social media landscape. Here’s how different sectors may be impacted.

  1. For TikTok: The proposed 50% U.S. ownership could reduce government concerns but raises questions about who will control the platform and how it will grow. The quick return shows how important TikTok is to users and businesses in the U.S.
  2. For Advertisers: TikTok’s return is a relief for advertisers, particularly those targeting younger demographics. However, ongoing regulatory scrutiny may prompt some to diversify their budgets across platforms like Instagram Reels, YouTube Shorts, and Snapchat.
  3. For Social Media Competitors: For competitors, TikTok’s short break gave other platforms a chance to attract users and creators. While TikTok’s return may reduce these gains, companies like Meta Platforms, Google, and Snap could still benefit if the regulatory issues continue.

Key Stocks to Watch

Meta Platforms Could Benefit from TikTok’s Challenges

Meta’s stock is trading at $612.77, up 61% over the past year. It has long competed with TikTok, particularly through Instagram’s Reels feature, which mirrors TikTok’s short video format.

With ongoing uncertainty around TikTok, Meta could attract more users and ad revenue as TikTok’s audience turns to more established platforms.

Google Is Well-Positioned to Thrive amid TikTok’s Uncertainty

Alphabet’s stock is trading at $196, gaining 34% over the past year. With TikTok back in the U.S., YouTube is still in a good position to attract former TikTok users and creators. YouTube Shorts, which lets users share short videos, stands to benefit as the app remains a top alternative for short-form content.

Recently, YouTube introduced new features like “gifting” on live streams, which encourages more interaction and supports creators. These features, along with YouTube’s strong monetization options, make it an attractive platform for creators looking to reach new audiences.

Snap Is a Quiet Winner in the Short-Video Race

Snap, the parent company of Snapchat, is currently trading at $10.86, down 35% from the previous year. While Snap’s reach isn’t as big as TikTok’s, it has consistently innovated in the short-video space with features like Stories and augmented reality (AR).

As younger users move away from TikTok due to uncertainty, Snap has a chance to capture some of that market.

Conclusion

In summary, with TikTok facing ongoing challenges, companies like Meta, Google, and Snap are well-positioned to benefit from shifts in user engagement and ad revenue. Other platforms like Pinterest (PINS) and Reddit (RDDT), which also compete with TikTok, may attract investors seeking alternatives. A quick comparison using the TipRanks Comparison tool can help traders decide which stocks to invest in.

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