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00:00 Brian
Some of the market’s most well-known social media stocks are off to a very bad year or a good year. There’s really nothing in between. Reddit stock was smashed by almost 10% on Thursday as RBC said its work shows weakness in ad dollars for small and medium-sized businesses. These are both important ad groups for Reddit. Meta stock is down 5% this year because investors don’t trust its CAPEX guidance for this year. They think CEO and founder Mark Zuckerberg will hike it up again in his AI push when they report in a few weeks.
00:36 Brian
And as for Pinterest, there is some chatter of the big time sell-off in the stock last November due to cautious guidance was overdone. So you were seeing a little bit of nibbling here by the Pinterest believers. The stock is up slightly year to date. Bottom line, what social media stock should be in your portfolio right now and why? Eric, back to you. I think you told me at the top of the show, you like Meta. Make your case.
00:58 Eric
Yeah, I like Meta because it’s, you know, growing its revenue 26% in the last quarter, it’s probably going to do something like that similar in Q4. Uh, it’s a business that has a line of sight on applying AI at scale across all those properties. No one else can say that, as I mentioned that earlier. So, at 20 times earnings, the recent stock kind of declines are really self-inflicted, as Meta has historically been want to do with their aspirational spend levels.
01:29 Eric
Uh, as they’ve also uh, done in the past, Brian is, they do get religion once they’re punished enough. Um, and so whether that was reducing CAPEX in the metaverse, uh, you know, I think that the street will be watching for them to rain in their CAPEX on their AI aspirations outside of their ad placement AI. And if that happens, I think the stock is really going to run at just 18 to 20 times earnings for forward earnings.
01:48 Brian
Me personally, I don’t have any problems with Pinterest or Reddit. I think both of those companies are doing some really good things on the AI front that are going to bear out in some pretty good profits this year. But Ines, uh, let’s just stay on Meta here for a minute because if they come out and raise CAPEX guidance again, you know, when they reported a couple months ago, their CAPEX guidance was was very strong. I think it spooked some folks on the street. If they raise that again, this stock could get crushed.
02:18 Ines
It could get crushed, but but this stock has gotten crushed in the past and then it goes back up. Meta has a way of that happening to the stock where it’ll get it’ll plunge 10% or something and then and then investors come in and buy it again.
02:46 Ines
The fact that they bought Manas AI, I mean, I’ve been watching that and I you know that I’ve been I I’ve used it just to test it out to see what it does. It is significant. I mean, this takes them from a simple, a little chatbot to agentic AI that they can offer to their billions of users and to uh to uh in in their business operations as well. So, I think that this that was a significant acquisition that they made, and I think that we’re going to hear more about it in the future.
03:13 Brian
Brooke, I’m not sure why I think this, but I I think you like Pinterest. I think you’re an avid Pinterest fan.
03:22 Brooke
Ah, Brian, interesting. I have been using Pinterest a lot for wedding planning. I’m embarrassed to be on my computer screen now, but I will but I will say I was reading a note from Laura Martin this morning about Reddit. And Reddit’s something that absolutely fascinates me. I’ll admit I just became a user in late of last year and she pointed out something really interesting within her note.
03:41 Brooke
She actually said that based upon a study from Semrush, Reddit was cited in approximately 40% of AI generated responses. And that sort of stat blew my mind because when you think about the type of content on Reddit, one, it’s all anonymous users. And so I feel as though people really go to the platform to confine it almost, to share maybe something that they wouldn’t even tell their closest friend. So it’s really this honest, open platform that I’ve seen as a as a new user, I’ve find very helpful.
04:36 Brooke
And so I think that it’s a really interesting one, and I know that it’s not on your your options here, but don’t discount Google’s YouTube. Every time you ask a young person where they’re going or what they want to be when they grow up, it’s primarily a YouTube content creator. And so don’t discount that as perhaps an alternative, uh social media app as well.
04:54 Brian
You know what, young people, go out and build something. Forget trying to create content on YouTube. I I hear I I can’t kind of I can’t knock the hustle. Go out there and build, I don’t know, fix a car or something. All right, thanks for the opening bit round table. You all have a wonderful weekend. You brought the heat for me today and I appreciate it.