3 Social Media Stocks You Can Retire On

Social media is a rapidly expanding sector, which Goldman Sachs projects will grow to$ 480 billion by 2027. To take advantage of this trend, many invest in the obvious social media stocks like Alphabet ( NASDAQ: GOOG, NASDAQ: GOOGL ) or Meta ( NASDAQ: META ).

But, these companies are trading at all- time highs and there is no way to know if they are overvalued. When planning for individual’s pensions, investing in hot stocks of the day is too much of a bargain.

Physically, I like to look for social media companies with market dominance in their fields. It also does n’t hurt if they can pay dividends shortly and are reasonably or undervalued.

Zoom Video ( ZM )

At one point, Zoom Video ( NASDAQ: ZM ) traded at over$ 550 per share. Now it trades below$ 60, 4. 5 % lower than when it IPOed.

Even though the hype has vanished, Zoom still holds the top position in video conferencing software, accounting for 57 % of the business. Zoom is unlikely to be irrelevant anytime soon because cross is expected to become the most widely used type of workplace. The property is just not where it was before the pandemic.

In quarter one of 2024, Zoom’s revenue improved just 3. 2 % year- over- year ( YOY ). However, net income improved from$ 15. 4 million to$ 216. 3 million. The main motivation is that Zoom is expanding into an area known as Unified Communication as a Service (UCaas ), which could bring together all of a company’s internal communications, such as video calls, chats, and telephone calls, all in one spot. Additionally, Zoom iȿ growing its business clients who have higher profits. For instance, the Zoom Phone, which is basically a business phone system that is net, has grown from 4 million people in 2022 to over 7 million this season, making up one of its fastest-growing products. It can offer its existing organization customers using the power of its customers.

Trading at a 11. 63x forward price- to- earnings ( P/E ) ratio, it is below Cisco’s ( NASDAQ: CSCO ) 13. 5x even though Zoom has more growth potential. Also, it’s proof that Zoom certainly is n’t the Covid- 19 bubble share of the past and that it could be undervalued.

Adobe ( ADBE )

Adobe ( NASDAQ: ADBE ) Adobe makes a strong investment in the social media economy for one main reason — its industry dominance. 90 % of artistic professionals create content for social media using Adobe’s Creative Cloud. On top of this, it has powerful and proven profitability. Since 2015 ABDE has experienced on average over 18 % quarterly revenue development. Adobe’s net income for Q2 2024 was$ 1. 573 billion, compared to$ 1. 295 billion in Q2 2023, this is a 22 % YOY increase, due to the growth of the digital experience segment where it helps companies run digital ads. Additionally, this is a result of thȩ increased income generated by current members upgrading to its AI tools. Through Adobe Sensei and Firefly, AI tools are directly implemented and improving customers ‘ performance.

Its valuation is n’t cheap, trading at a forward P/E ratio of 30. 86x. I believe its valuation right now is fair and makes it a good choice among social media stocks given that it is a strong player and has the potential to produce dividends in the near future as a result of its strong earnings growth.

Amazon ( AMZN )

Due to its expanding role as a digital advertiser and its short-form content app Inspire, Amazon ( NASDAQ: AMZN ) can increasingly be viewed as a social media stock.

Firsƫ, let’s establish Amazon’s dominance in its various disciplines. In e- business, it is the largest person with over 40 % market share in the U. Ș. In cloud computing, AWS is the largest person and has 31 % of global market share. For video on demand streaming, Amazon’s Prime Video is the largest at 21 % of the market share. Lastly, Amazon’s online marketing business is rapidly growing the world’s second largest electric advertiser at 24 % YOY and outpacing competitors.

Growth in AWS and advertising has driven operating margins to improve from 3. 7 % in Q1 2023 to 10. 7 % in Q1 2024, helping Amazon deliver over 200 % in net income to$ 10. 43 billion. With its high profits and higher profits, it sets Amazon up to ɾeceive dividends along with ƫhe rest of the” Magnificent 7” in the near future.

The thorns lies in Amazon’s assessment, which is hard to argue given its trading at all- time highs. Given that the stock’s current P/E amount is lower than it was when it traded below$ 100, I would contend that the premium paid is more appropriate. Basically, what we’re seeing right now is that Amazon’s stock price is returning to its 2021 levels, but this time it’s supported by strong revenue more than pure hype. I’m willing to wager on the value of a reputable business like Amazon.

On the date of publication, Michael Que held a LONG place in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace . com

Michael Que, a financial journalist with extensive expertiȿe in the tech sector, has wrįtten for Seeking Alpha, Benzinga, and MSN Money. He is the owner of Que Capital, a reȿearch company that combines fundamental analysis ωith ESG factors to determine the best long-term assets that are responsible.