Social media has been taking the world by storm for more than a decade as it allows people to stay connected with each other at all times. It also provides a platform for users to express themselves or highlight their content and creativity with the help of posts, images, audio, videos and so on. Moreover, the platforms allow businesses to advertise their products and services and in turn, increase their reach to people.
Notably, per a report by ReportLinker, the global social media market is estimated to grow from $94.83 billion in 2020 to $102.62 billion in 2021, at a CAGR of 8.2%, as quoted in a
GlobeNewswire article
. The report further mentioned that the market is estimated to reach $308.96 billion in 2025 at a CAGR of 32%.
According to the report, rising data consumption and increasing penetration of mobile devices, tablets and so on, will help in bolstering the social media market. This is because the rising sales of devices like smart phones and tablets lead to an increase in time spent on social media.
Meanwhile, even though the outbreak of the COVID-19 pandemic significantly affected businesses across the globe, the report mentioned that many media markets were “unaffected or benefited from this as they transmit their content remotely through digital channels.” In fact, the pandemic helped in boosting social media platforms as people found it to be a feasible way of interacting with each other while maintaining social distancing. A
survey
by Digital Commerce 360 last year found that social media usage went up in the United States. Notably, 72% of respondents agreed that their social media consumption went up during the pandemic while 43% agreed that they were posting more.
Moreover, social media is also being used for shopping as 82% of respondents in the survey indicated that social media is the most common channel from where they get to know about a brand and its products. Reflective of this trend, advertising spend looks set to go up in the future. Notably, Statista estimated that ad spending in the social media advertising segment worldwide is estimated to show an
annual growth rate of 5.8%
from 2021 to 2025.
3 Social Media Stocks to Keep an Eye on
Social media has emerged as one of the most important ways in which people stay connected with one another and the global social media market looks poised to grow further. In fact, Statista stated that in 2020,
over 3.6 billion
people used social media worldwide and it is estimated that its reach will increase to almost 4.41 billion people in 2025. Hence, this makes it a good time to look at social media stocks that can make the most of this potential going forward. Notably, we have selected three such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Pinterest, Inc.
PINS
provides a visual discovery engine in the United States and internationally. The company’s engine allows people to find inspiration for their lives, including recipes, style and home inspiration, DIY and others. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 71.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 71.4%.
Facebook, Inc.
FB
develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 8.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 10.9%.
Twitter, Inc.
TWTR
operates as a platform for public self-expression and conversation in real time in the United States and internationally. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 4.3% over the past 60 days. The company’s expected earnings growth rate for the next year is 26%.
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