Dec 13, 2023
Vice President Kamala Harris recently declined to comment personally on the topic of TikTok — despite the White House’s strong stance on the matter.
South Dakota Governor Kristi Noem took issue with Harris’ non-statement at the New York Times’ annual DealBook summit in late November.
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“I can't believe she actually said that,” Noem said in a recent interview with Fox News. “They literally banned it from federal devices after we took action.”
South Dakota was the first U.S. state to officially ban the use of TikTok on state-owned or state-leased devices. The decision was made due to concerns over national security risks associated with TikTok, given its ownership by ByteDance, a Beijing-based company.
Subsequently, the federal government implemented similar restrictions.
“So how can she legitimately sit there and go, ‘Yeah, I'm not going to comment?’ They know and they acknowledged that it is a national security threat. Grow up and have an opinion,” Noem remarked. “If you're going to be the vice president of the United States, just give us an honest answer for once.”
Noem’s message extends beyond her views on Harris. She’s also encouraging the general public to stop using the platform.
“If you are using TikTok, you are helping China destroy America. You are facilitating it. So get off of TikTok,” she stated.
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Should Americans heed Noem's advice and abandon TikTok, this shift could significantly benefit its rival social media companies. Here’s a look at two of them — Wall Street already sees upside in this duo.
Meta Platforms (META)
While TikTok seems to be capturing widespread public attention, investors might not want to ignore Meta (META) — as the company remains a behemoth in the social media industry.
In particular, the broad reach of Meta's family of services — including Facebook, Instagram, Messenger and WhatsApp, among others — amassed a whopping 3.96 billion monthly active users as of the end of Q3, marking 7% growth year over year. This figure represents roughly of the global population.
The company is also pushing Reels, its short video product on Instagram, as a strategic response to the popularity of TikTok.
The move is showing signs of success.
In the latest earnings conference call, Meta CEO Mark Zuckerberg said, “We estimate that with all the ranking and product improvements that we've made, Reels has driven more than 40% increase in time spent on Instagram since launch.”
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Meta stock has also shown remarkable growth, soaring 167% year to date. JPMorgan analyst Doug Anmuth sees further upside on the horizon. The analyst has an "overweight" rating on Meta and a price target of $400 — roughly 23% above the current levels.
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Alphabet (GOOGL)
As the parent company of Google, Alphabet (GOOGL) now commands a market cap of nearly $1.7 trillion.
The company’s influence extends far beyond its role as a search engine giant.
For instance, Alphabet owns YouTube, one of the largest video-sharing platforms in the world. YouTube ventured into the short-form video market with the introduction of YouTube Shorts in the U.S. in 2021, thereby positioning itself as a competitor to TikTok and challenging its dominance in this fast-growing segment.
Alphabet CEO Sundar Pichai said in October that he’s “really pleased with the growth and engagement” on YouTube Shorts.
“Shorts now average over 70 billion daily views and are watched by over 2 billion signed-in users every month,” he said.
Alphabet shares have climbed 48% so far in 2023. Morgan Stanley analyst Brian Nowak has an “overweight” rating on the company with a price target of $150, implying a potential upside of 13%.
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Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
