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In this article, we’ll explore the top 10 cheap social media stocks that hedge funds recommend for investment. Dive into the world of social media and discover the potential hidden in these stocks. If you’re interested in finding more options, make sure to check out “5 Cheap Social Media Stocks to Buy.”

The Power of Social Media

Social media has become a game-changer when it comes to marketing for businesses of all sizes. With its diverse platforms and extensive reach, social media offers unparalleled opportunities. However, staying up-to-date with the latest trends is crucial as technology evolves and platforms fluctuate in popularity.

What to Expect in the Social Media Landscape

To succeed in the world of social media, it’s essential to anticipate upcoming trends. According to Market Research Future, short-form videos, increased video budgets, content creation, and influencer marketing are expected to dominate in the coming year. Additionally, the global social media security market is predicted to experience significant growth, reaching a size of approximately $3863.45 million by the end of 2030.

The Changing Landscape of Ad Revenue

Insider Intelligence forecasts that ad revenue growth will rebound to 8.2% this year after a historic 2.0% drop in 2022. However, this growth won’t be enough to reverse the declining share of ad revenue. Meta Platforms, Inc. (NASDAQ:META), previously known as Facebook, will witness a decline in its portion of global digital ad spending from 22.0% in 2021 to 19.4% this year. Moreover, Facebook’s monthly users are projected to increase by only 0.3%, and its share of internet users will fall below 45% for the first time. Instagram’s ability to compensate for Facebook’s losses is also dwindling, with a growth rate of less than one percentage point in its share of global internet users, reaching 28.7%.

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The Rise of TikTok and Douyin

On the other hand, TikTok and Douyin, two social platforms owned by ByteDance, are expected to experience tremendous growth. Advertising revenue for both platforms is forecasted to increase by 24.5% in 2023. ByteDance’s share of worldwide digital advertising expenditure is predicted to reach 5.8%, surpassing the combined share of LinkedIn, Snapchat, Twitter, and YouTube. By 2023, the total monthly user base for TikTok and Douyin is estimated to reach 1.70 billion users, making up 36.5% of all internet users globally and 45.2% of all social network users.

The Search for the Next Significant Social App

Amid the chaos on Twitter, many users are seeking alternative platforms that promote free conversations. This quest for the next significant social app is fueling the rapid expansion of platforms like BeReal and Gas. This trend should serve as a cautionary signal for Snapchat and TikTok. If US lawmakers or regulators don’t impede its growth, TikTok is poised to join Facebook and Instagram as the third social network to exceed 100 million monthly users in the US by 2023.

The Best Social Media Stocks to Invest In

Considering all these factors, it’s wise to explore investing in social media stocks. Some of the top options include Microsoft Corporation (NASDAQ:MSFT), Match Group, Inc. (NASDAQ:MTCH), and Meta Platforms, Inc. (NASDAQ:META). These stocks have been favored by hedge funds and are deemed to have great potential in the market.

Our Methodology

To identify the top cheap social media stocks, we analyzed hedge fund sentiment and focused on stocks with P/E ratios of less than or close to 29, which is the Software – Internet average industry PE ratio as of April 4. Insider Monkey’s database of 943 elite hedge funds provided us with the necessary data from the fourth quarter of 2022. The list is arranged in ascending order of the P/E ratio for each stock.

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Let’s take a closer look at some of these stocks recommended by hedge funds:

10. Hello Group Inc. (NASDAQ:MOMO)

  • Number of Hedge Fund Holders: 20
  • P/E Ratio as of April 4: 8.38

Hello Group Inc. offers social and entertainment services through mobile devices in China. The company’s Momo platform includes a mobile application and related properties, features, functionalities, tools, and services. Hello Group Inc. reported impressive Q4 non-GAAP EPADS and revenue, surpassing Wall Street estimates. The company also declared a per-share annual dividend. Experts believe that Hello Group Inc. has the potential for significant growth beyond the reopening of mobility and dating apps in China.

9. Yalla Group Limited (NYSE:YALA)

  • Number of Hedge Fund Holders: 4
  • P/E Ratio as of April 4: 8.50

Yalla Group Limited operates a social networking and entertainment platform called Yalla, which focuses on voice communication. The company primarily serves the Middle East and North Africa regions. Yalla Group Limited has been performing well, with its revenue beating market estimates. With a positive outlook for Q1 2023, it’s considered one of the best cheap social media stocks to invest in.

8. JOYY Inc. (NASDAQ:YY)

  • Number of Hedge Fund Holders: 20
  • P/E Ratio as of April 4: 19.93

JOYY Inc. manages social media platforms that provide users with interactive and immersive experiences through video and audio-based social platforms. The company’s platforms, such as Bigo Live, Likee, Hago, and imo, offer various features and services. JOYY Inc. reported strong Q4 results and expects net revenues to increase in the first quarter of 2023. Experts believe that JOYY Inc. has great potential, making it one of the best cheap social media stocks to watch.

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7. Tencent Holdings Limited (OTC:TCEHY)

  • Number of Hedge Fund Holders: N/A
  • P/E Ratio as of April 4: 18.56

Tencent Holdings Limited is an investment holding company that delivers value-added services and online advertising services in China and globally. It offers a wide range of consumer services, including communication, digital content, and fintech. With positive prospects for advertising revenue growth and core gaming engines, Tencent Holdings Limited is considered one of the top cheap social media stocks to invest in.

6. NetEase, Inc. (NASDAQ:NTES)

  • Number of Hedge Fund Holders: 31
  • P/E Ratio as of April 4: 20.70

NetEase, Inc. provides online services, including diverse content, community, communication, and commerce, in China and internationally. The company operates various segments, such as Online Game Services, Youdao, Cloud Music, and Innovative Businesses and Others. NetEase, Inc. received an upgrade from JPMorgan with a positive price target, creating a buying opportunity for investors. With elite hedge funds showing bullish sentiment, NetEase, Inc. is one of the top choices among cheap social media stocks.

Conclusion

Investing in social media stocks can provide exciting opportunities for growth and financial success. By considering the recommendations from hedge funds, you can make informed decisions about your investment portfolio. Don’t miss out on the potential of these cheap social media stocks.

Continue reading to discover more options and gain a deeper understanding of the market. Visit Simple Money Tips – Steps To Financial Freedom for more valuable insights and tips on achieving financial freedom.

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