Snap Inc. (SNAP) shares surged 7% on Friday as the U.S. Supreme Court heard arguments in a case that could lead to a ban on TikTok, a direct competitor to Snapchat. Meta Platforms Inc. (META) and Trump Media & Technology Group Corp. (DJT) also climbed, benefiting from the potential elimination of TikTok from the U.S. market.

The Supreme Court is considering a law that could ban TikTok in the U.S. if its Chinese parent company, ByteDance, does not sell its U.S. operations by Jan. 19. TikTok has argued that the ban would be an "unprecedented censorship" of the more than 170 million Americans who use the app. However, the Supreme Court has not yet indicated whether it will halt the law before the deadline.



If TikTok is banned, users may shift to other short-video platforms like Snapchat, Instagram Reels, and YouTube Shorts. Morgan Stanley analysts expect that a TikTok ban would bring a "significant time spent and monetization opportunity for competitors," with Meta and YouTube being the "largest beneficiaries" (Source: Morgan Stanley analysts, Jan. 10, 2025).

Snapchat, owned by Snap, could also see an increase in users and ad revenue if TikTok is banned. In Q3 2024, Snap's ad revenue increased by 11% year-over-year to $1.1 billion. A TikTok ban could accelerate this growth, as advertisers look for alternative platforms to reach their target audiences.



Meta, which owns Instagram and Facebook, could also capitalize on a TikTok ban by redirecting users and advertisers to its Instagram Reels feature. Meta already dominates the social media advertising market and trails only Google in market share for overall U.S. digital ad spending (Source: eMarketer). By offering attractive advertising packages and innovative targeting options, Meta could capture a significant portion of the "dislocated" advertising dollars from TikTok.

Trump Media & Technology Group could also benefit from a TikTok ban, as it could attract some of TikTok's users and capture a larger share of the market for short-form video content. However, it's important to note that Trump Media & Technology Group has not publicly expressed interest in acquiring TikTok.

In conclusion, a potential TikTok ban could have significant implications for Snap, Meta, and Trump Media & Technology Group. As the Supreme Court deliberates on the case, investors should monitor the situation closely, as the outcome could impact the market share and ad revenue of these companies.