Check out our social media stocks list to learn about the top companies in this growing market.
The rise of the top social media stocks over the last decade or so has revolutionized the way we connect on the internet. These social media platforms also offer major investment opportunities.
Social media giant Facebook’s (NASDAQ:FB) commanding market cap of around US$800 billion is a clear example of the huge influence social media companies have on the stock market.
In fact, social networks are front and center on the top 500 global sites list from Alexa, a web traffic data company. Alexa calculates its rankings by looking at pageviews and average daily visitors, and social media stocks have a strong presence, with many breaking into the top 20.
Below is a list of the five top social media companies, as per the information from Alexa. These social media stocks offer investors exposure to growth in the social media industry. All numbers and figures were current as of October 29, 2020.
1. Google (Alphabet) (NASDAQ:GOOGL)
Market cap: US$1.07 trillion; stock price: US$1,572.35
It goes without saying that the most-visited site in the world is Google. That makes sense as many people have the search engine as their homepage, guaranteeing a certain amount of hits each day. In terms of social media, the Google+ social network is a Facebook rival that never really took off.
That said, Google receives many social media hits from its subsidiary, YouTube, which is the second most-visited site in the world. YouTube was established in 2005, when the world’s first YouTube video was uploaded, and Google purchased the video-streaming site for US$1.65 billion in 2006. Over a decade later, YouTube has more than 2 billion users who generate billions of views each month.
Interestingly, the way people watch YouTube is changing, as half of YouTube views now come from mobile devices. The company’s primary source of revenue is its advertising service Google Adwords; it also gets revenue by selling ads for its homepage, its search results pages and within videos.
Market cap: US$804.65 billion; stock price: US$282.45
It’s no surprise that Facebook is on this social media stocks list. Based in Menlo Park, California, Facebook’s mission statement emphasizes its focus on sharing between friends as a means of connecting the world. Facebook has over 52,000 employees, and according to Zephoria Digital Marketing, 2.7 billion people connect via Facebook on a monthly basis.
The social media company bought Instagram in 2012, and the latter is listed as number 25 on Alexa’s list. As of fall 2020, Instagram had over 1 billion monthly active users, up from 800 million in 2017.
3. Zoom Video Communications (NASDAQ:ZM)
Market cap: US$139.30 billion; stock price: US$489.78
Zoom Video Communications holds the 14th position on Alexa’s list of top sites on the web, a position that has likely been bolstered by the popularity and near necessity of online communications in a world rocked by COVID-19. Launched in 2013, the tech company based in San Jose, California, provides videotelephony and online chat services through a cloud-based, peer-to-peer software platform.
Users are logging on to Zoom not only to connect for business and distance education, but also for social networking with family and friends. Now, Zoom is as much a household name as Google or Facebook. Zoom’s peak daily meeting participant figures skyrocketed from approximately 10 million in December 2019 to 200 million in March 2020.
4. Twitch (Amazon) (NASDAQ:AMZN)
Market cap: US$1.62 trillion; stock price: US$3,232.65
Another social media platform that is benefiting from the COVID-19 lockdowns is Twitch. Acquired by Amazon in 2014 for US$970 million, Twitch is the world’s leading live-streaming platform for gamers. As of late 2020, Twitch had an average of 83,700 concurrent live channels broadcasting at any time, up 69 percent from the 49,500 average in 2019.
Influencer Marketing Hub states that while Twitch may be “primarily a platform where gamers can stream their playing,” in October 2020, the most popular category was “just chatting,” with an average viewership of 277,951. This figure is greater than the most popular game on the platform, League of Legends, which averaged 218,394 viewers for the month.
Also in October 2020, more than 430,000 people watched US Congresswoman Alexandria Ocasio-Cortez play Among Us, a popular online game. The Democratic representative from New York used her Twitch channel to encourage young people to vote in the US presidential election.
5. Twitter (NYSE:TWTR)
Market cap: US$41.47 billion; stock price: US$52.43
At number 48 on Alexa’s list, Twitter is a social media stock with a real-time conversation platform designed for self expression and conversation. The majority of Twitter’s revenue (82 percent in Q2 2020) is generated through advertising, such as promoted Tweets, promoted accounts and promoted trends.
Twitter has historically seen an upward trend in monthly active users, as per Statista. At the end of 2019, Twitter had roughly 152 million monetizable daily active users; in the second quarter of 2020, that number increased to 186 million.
This is an updated version of an article originally published by the Investing News Network in 2015.
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Securities Disclosure: I, Melissa Pistilli, currently hold no direct investment interest in any company mentioned in this article.