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Highlights:
- Meta Platforms, Inc. (NASDAQ:META) reported a decline in its revenue in Q2 FY22.
- Twitter, Inc.'s (NYSE:TWTR) advertising revenue increased by two per cent YoY in the latest quarter.
- Snap Inc. (NYSE:SNAP) revenue increased by 13 per cent YoY in Q2 FY22.
Stocks of Meta Platforms, Inc. (NASDAQ: META), Twitter Inc. (NYSE: TWTR), Alphabet Inc. (NASDAQ: GOOGL), and Snap Inc. (NYSE:SNAP) have recently been on trend following their quarterly earnings release.
The social media subsector has been growing at a significant pace in recent years, and the COVID-19 pandemic bumped up this speed to an even greater extent.
So, let's explore some of the top social media stocks that could continue to be on the investors' radar in August.
Meta Platforms, Inc. (NASDAQ:META)
The social media company, formerly known as Facebook, held a market cap of US$ 431.88 billion as of writing. META stocks gained traction after it released its earnings results on July 27 after the closing bell.
The Menlo Park, California-based company posted total revenue of US$ 28.82 billion in Q2 FY22, down by one per cent from US$ 29.07 billion in the year-ago quarter. This is said to be the first time the company reported a decline in its quarterly revenue.
Its net income plummeted 36 per cent year-over-year (YoY) to US$ 6.68 billion, or 32 per cent to US$ 2.46 per diluted share, in Q2 FY22.
Its daily active users or DAUs increased at a three per cent YoY rate to 1.97 billion on average for June 2022.
META stock notched a sharp decline this year, falling about 52.76 per cent. On an annual basis, it dropped by 57.41 per cent. However, at its trading price on July 28, META stock was 3.28 per cent higher than its 52-week low of US$ 154.25 (June 23, 2022).
Twitter, Inc. (NYSE:TWTR)
TWTR stock has been fluctuating since Tesla CEO Elon Musk unveiled his plan to acquire the social media and microblogging company in April. Since then, it has been one of the hottest topics marking several twists.
However, the company has gained the limelight following its quarterly earnings release on July 22.
Twitter's monetizable daily active usage (mDAU) was 237.8 million in Q2 FY22, increasing at a rate of 16.6 per cent YoY. It marked a one per cent decline in its second quarter fiscal 2022 revenue of US$ 1.18 billion. Notably, its revenue from advertisement soared two per cent YoY to US$ 1.08 billion.
The San Francisco, California-based firm posted a net loss of US$ 270 million, or US$ 0.35 per diluted share in Q2 FY22, a notable drop from an income of US$ 66 million, or US$ 0.08 per diluted share in Q2 FY21.
TWTR stock fell 6.28 per cent year-to-date (YTD) and 42.10 per cent in one year. However, in the last six months, it showed gains of 19.75 per cent.
Snap Inc. (NYSE:SNAP)
The camera and social media firm reported its fiscal 2022 second-quarter earnings results on July 21. The US$ 15.87-billion market cap firm had daily active users of 347 million in Q2 FY22, representing a surge of 18 per cent YoY or 54 million from the year-ago quarter.
Snap's revenue was US$ 1.11 billion, noting an increase of 13 per cent from that of US$ 982.10 million in the previous year's comparable quarter.
Its net loss was US$422.06 million, or US$ 0.26 per diluted share, a deterioration from a loss of US$ 151.66 million, or US$ 0.10 per diluted share in Q2 FY21.
On July 28, SNAP stock was trading 29 per cent above its 52-week low of US$ 31.30 (February 24, 2022).
SNAP lost 79.49 per cent this year while decreasing 87.32 per cent in the last 12 months.
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Alphabet Inc. (NASDAQ:GOOGL)
The Google parent lost 21.42 per cent YTD, while declining 16.36 per cent in the last 12 months. However, GOOGL stock returned gains of 4.45 per cent this month and rose 5.44 per cent this week.
The US$-1.49 trillion market cap company had a relative strength index (RSI) of 52.39 as of July 28, Refinitiv data showed. RSI between 50 and 70 generally indicates that the stock is currently in a stable state.
Alphabet's revenue grew at a rate of 13 per cent YoY to US$ 69.68 billion in Q2 FY22. Its net income was US$ 16 billion, or US$ 1.21 per diluted share, in Q2 FY22. In contrast, the net income of the Mountain View, California-based firm was US$ 18.52 billion, or US$ 1.36 per diluted share, in the fiscal 2021 second quarter.
Pinterest Inc. (NYSE:PINS)
The image sharing and social media firm held a market cap of US$ 12.51 billion. Its RSI is 48.15 as of July 28, according to Refinitiv data. RSI between 30-50 suggests that the stock could be highly volatile at the moment.
Like other above-mentioned stocks, PINS stock also seems to have had a rocky year so far, declining about 48.08 per cent YTD. It fell and 75.35 per cent in one year.
Its Q1 FY22 revenue grew 18 per cent YoY to US$ 575 million. Iits net loss improved 76 per cent to US$ 5.28 million in the latest quarter. In Q1 FY21, its net loss was US$ 21.67 million.
Bottom line
The increasing digitalization and increasing number of internet users globally bolstered demand in the social media subsector. However, due to various macroeconomic factors and geopolitical tensions, investors seem to have shifted their focus on safe shelter recently.
The communication services segment was among the worst-hit sectors this year, with the S&P 500 Communication Services sector plunging 27.89 per cent YTD and slipping about 29 per cent on an annual basis.
