Trump Media & Technology throng (NASDAQ: DJT), the parent business of Truth Social, has taken investors on a wild ride since it went community by merging with a special purpose purchase business (SPAC) on March 26, 2024. Its stake opened at $70.90, sank to an all-period low of $12.15 on Sept. 23, and now trades at about $33.

In 2023, Trump Media generated just $4.1 million in income while racking up a net deficit of $58.2 million. In the first nine months of 2024, it only generated $2.6 million in income as its net deficit widened to a whopping $363 million. With an enterprise worth of $5.44 billion, its stake trades at 1,322 times last year’s income — so it’s a meme stake that is mainly being propped up by the information pattern as it relates to President-elect Donald Trump instead of operating a sustainable revenue strategy.

Unlike other social media companies, Trump Media doesn’t disclose its number of energetic users, ad impressions, or average income per user. So there are very few budgetary metrics available to analyze the health of the business. It’s getting ready to launch its own streaming video platform, but that’s a notoriously expensive trade to shatter into.

So instead of chasing Trump Media’s wild short-term swings and hoping it somehow scales up its business, investors with a long-term mindset should simply buy two more reliable social media stocks instead: Meta Platforms (NASDAQ: META) and Pinterest (NYSE: PINS).

The social media chief: Meta Platforms

Meta is the globe’s largest social media business. It served 3.29 billion daily energetic people across its entire household of apps (Facebook, Instagram, Messenger and WhatsApp) in its latest quarter. That represented 5% user growth from a year earlier. In 2023, Meta’s income and returns per distribute (EPS) grew 16% and 73%, respectively. In 2024, analysts expect its income to rise 21% and 52%, respectively.

That acceleration was mainly driven by a warmer macroeconomic surroundings, the expansion of its Reels short video platform and more ad spending from Chinese e-commerce and gaming companies. The robust growth of its high-spread advertising business, which accounted for 98% of its income last year, offset the persistent losses at its Reality Labs division which produces its virtual reality (VR) and augmented reality (AR) products.

Meta has been ramping up its near-term spending on its cloud infrastructure, artificial intelligence (AI) and Reality Labs segments, but it still generated enough money to buy back $30.1 billion in shares and pay out $3.8 billion in dividends in the first nine months of 2024.

Analysts expect Meta’s income and returns to develop another 15% and 12%, respectively, in 2025. Its stake still looks reasonably valued at 22 times forward returns — and it could still have plenty of room to develop as it locks in more users, rolls out recent features and attracts more advertisers.

The resilient niche challenger: Pinterest

Pinterest carved out a niche in the social media trade with its virtual pinboards for sharing ideas, interests and hobbies. It experienced a major growth spurt during the pandemic as more people stayed at home and looked for online shopping ideas, recipes, DIY projects and household oriented activities on its pinboards. However, its growth cooled off as the pandemic lockdown period passed and more people went outside again.

Yet Pinterest is still growing. In 2023, its income rose 9%, its adjusted returns before yield, taxes, shortfall in worth and loan schedule (EBITDA) jumped 55%, and its total number of monthly energetic users (MAUs) grew 11% to 498 million. By the third quarter of 2024, its MAUs had swelled to 537 million — which should silence the bears who had written it off as a pandemic-era fad stake that would run out of steam.

For the packed year, analysts expect its income and adjusted EBITDA to develop 19% and 43%, respectively. For 2025, they expect its income and adjusted EBITDA to rise 16% and 25%, respectively. It’s also expected to turn profitable on a generally accepted monetary reporting principles (GAAP) basis this year.

Most of that growth should be driven by its growing popularity among Gen Z users (who now account for over 40% of its users), the integration of more short videos, recent AI-driven recommendation tools, more e-commerce tools for its “shoppable” pins and its international expansion. At 13 times next year’s adjusted EBITDA, Pinterest’s stake still looks dirt cheap relative to its growth potential.

Randi Zuckerberg, a former director of trade advancement and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms and Pinterest. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content associate offering budgetary information, analysis and commentary designed to assist people receive control of their budgetary lives. Its content is produced independently of USA TODAY.

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