As we inch closer to the end of 2022, many investors will look back on the year as one of the most challenging in history. The inflation and fears of looming recession have led to major indexes falling significantly from their peak. But smart investors know that putting money to work in the downmarket can be a strong move. History has shown that there is a correction in every bear market and this means 2023 could be a great way to diversify your portfolio with some of the top social media stocks.
Social media has become an integral part of our lives and it is one thing many of us cannot live without. Tesla (NASDAQ:TSLA) CEO, Elon Musk has been making waves after the acquisition of Twitter which has led many investors to look at alternative social media stocks to buy. Here are our top three social media stock picks for 2023.
At the top of my list is Snap (NYSE:SNAP). It is a very speculative pick but remains highly popular amongst youngsters today. SNAP stock is close to its multi-year lows but it has a few bright spots that should not be ignored. Due to its high popularity with the under-25 crowd, about 60% of its user base, Snap has a market that advertisers are ready to pay for since the return could be higher in the long term.
Snapchat recently announced a partnership with H&M (OTCMKTS:HNNMY) for the launch of a digital collection powered by the Snap Camera. Such partnerships, targeted at the young audience can help the stock rebound in the coming year. Despite the negative sentiments around the company, the platform is growing rapidly and the daily active users have grown at a double-digit pace and hit 363 million which is a positive sign. Due to the negative earnings, the stock has seen a massive 80% dip over the past year but it is a good chance to jump in. However, I’d recommend taking a small position for now.
Pinterest (NYSE:PINS) has been in the news for several reasons. And It is definitely one of our favorite social media stock picks for 2023. The social media company had become a favorite during the pandemic and suffered after the reopening. But PINS stock looks like a good bet at the lower levels. Despite the dip, the stock is performing much better than its rivals. The management is highly optimistic about the company’s future and expects to generate a revenue of $3.24 million in 2023, 15% higher than in 2022.
Yes, the company has suffered as pandemic worries have waned but it still remains a go-to for users to share ideas through social media and it is an ideal place for handling creative projects. The best thing about Pinterest is its loyal customer base which is attracting brands and advertisements. It recently entered into an agreement with Elliott Investment Management which is a positive sign for shareholders since a member of Elliott will join the Board of Directors at Pinterest and attempt to improve its social media business.
PINS stock is up 34% over the past six months and has gone from $17 to $23 today. It is a good idea to bag the stock while it is trading below $25 to make the most of the upside in the coming year.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) has been in the news for the recent layoffs but it is a leader in the social media space. Even today, despite the volatility, META remains a stock to watch out for. Facebook has consistently impressed investors with solid earning numbers and if you look at the profitability, Facebook does not fail to impress. The number of active users has declined since the company shifted focus towards metaverse which is a highly risky and costly endeavor. META stock has seen a high of $378 and it is down to $115 today, which is a solid opportunity for investors to grab the stock.
The management is still playing safe at this point and has cut down on the expenses in other areas. Another reason to invest in Meta is its range of apps that continue to generate profits. Besides Facebook, it continues to earn money from WhatsApp, Messenger, and Instagram. The company is making consistent progress in developing virtual reality technology and artificial intelligence. A few years down the line, these projects could pay off.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.