By Vlad Schepkov
TikTok, the controversial Chinese-owned short-form video app, widely criticized in the West for security and user privacy concerns, has been a subject of heated political debate in the U.S. for as long as it's been around.
In light of the renewed scrutiny and another wave of calls for the ban of TikTok, Bernstein analysts share their thoughts on where do "150M US users, 2.8T annual minutes, and the ~$7-8Bn in expected TikTok's 2024 US revenue" go.
"Users go where they already are," the analysts say and see Meta Platforms' (NASDAQ:META) Instagram's Reels "where users are already watching the most short-form videos outside TikTok," and Snapchat's (NYSE:SNAP) Spotlight "which offers the highest demographic overlap with TikTok" to be "the big winners."
On the revenue side, Bernstein sees ad spend heading "where advertisers are most comfortable with the highest ROI". They once again highlight META "with best-in-class ad product including SFV," but also believe Alphabet's (NASDAQ:GOOGL) "YouTube offers the highest overlap of branded campaign objectives." The report adds, "YouTube was also likely the largest share donor to TikTok ads, and could see ad dollars return home."
The analysts conclude: "It's possible we could see META (+20-30%), GOOGL (+10-20%), and SNAP (+40-50%) stocks jump on a confirmed ban."
Shares of META are up over 60% YTD; SNAP has gained nearly 25% in the period; GOOGL is up a more modest 16%.
All three stocks are recording modest pre-market gains today.