3 Rising Social Media Stocks to Buy Now

Social media is taking over the world, and these three stocks are on fire.

phone with snapchat logo

Social media has never been more prominent, and social media stocks are faring well. But did you know just how well they’re doing this year?

The Global X Social Media ETF (SOCL), whose holdings include the top social media stocks from around the world (namely in the U.S. and China), is up 42% this year, versus a 24% run-up in the tech-heavy Nasdaq. Going back even further, SOCL is up 62% in the last two years, versus a 45% jump in the Nasdaq. In the last five years, the outperformance of social media stocks compared to their index is 175% to 140%. So this is not a new phenomenon.

However, this year’s outperformance has been far more pronounced. And it could continue that way in the coming years as social media continues to take over the world – for better or worse.

Here are three social media stocks that have impressed the most so far in 2020:

Snap Inc. (SNAP) | 2020 Gains: 62%
Remember Snap Inc.? It’s the company that owns Snapchat, the app that allows you to show photos and videos that “disappear” after a short period of time. SNAP stock came public to much fanfare in February 2017 before completely melting down in the wake of this overhyped IPO, falling from 27 to 11 a share in its first six months of trading. Now, for the first time, SNAP is approaching its IPO closing-day price, reaching 26.8 after rising nearly 170% since March.

With accelerating sales growth (+27% expected this year, +38% expected in 2021) and improvement on the bottom line, Snap Inc. finally looks stable. Snap Inc. (SNAP) is one of the top social media stocks today.

Pinterest (PINS) | 2020 Gains: 138%
Pinterest is a favorite of our growth investing expert, Mike Cintolo. Here is what Mike wrote about the company in late September – right before the stock jumped 15% in a week!

“We think Pinterest has the makings of the next big online winner, with a unique, visual-based offering that provides a different experience than the competition: Whereas e-commerce sites are great if you already generally know what you want, Pinterest allows users to discover what they might want … and, increasingly, pull the trigger on that purchase. The firm is attracting a ton of new users (up 39% in Q2, including many prior users that had dropped off before) that should drive advertising revenues much higher, especially as the company more directly connects users with products. (Product-only searches grew eight-fold in the first half of this year!) Revenues were up just 4% in Q2 as advertisers pulled in, but the future looks very bright, with 30%-ish revenue growth and an earnings lift-off expected in the quarters ahead.”

Those words sound quite prescient, with PINS stock showing no signs of slowing. Buy it on the next dip.

Twitter (TWTR) | 2020 Gains: 45%
Like Snap Inc., Twitter got off to a rocky start when it came public in late 2013. Four years after its market debut, TWTR was still trading at roughly half of its IPO price. There have been plenty of ups and downs since, revenues have stabilized the last couple years and the company has finally turned profitable, though both top and bottom lines will take a step back this year. Still, with strong growth expected to return in 2021, investors are looking forward, and TWTR stock has been on a tear since April. Twitter (TWTR) has become one of the top social media stocks today.

In sum: If you believe the message of the “The Social Dilemma” movie (I’ve watched it, and I do), social media may have changed social behaviors for the worse. But at least social media stocks could make you rich. And right now, these three stocks are the best candidates.

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