Threads' Surpassing X in Daily Active Users: A Tipping Point for Meta's Ad Revenue Recovery?

The social media landscape in 2025 is a battleground of fragmented attention spans, algorithmic dominance, and platform-specific monetization strategies. At the heart of this competition lies a pivotal question: Can Meta's Threads, a text-first platform launched in 2023, overtake X (formerly Twitter) in daily active users and catalyze a recovery in Meta's ad revenue? The answer hinges on understanding the interplay of user behavior, AI-driven monetization, and the broader dynamics of a market where no single platform holds a monopoly on engagement.

The Threads-X Rivalry: A Mobile-Centric Shift

By June 2025, Threads had surged to 115.1 million daily active users on mobile devices, closing the gap with X's 132 million. While X retains a 15.2% year-over-year growth slowdown, Threads' 127.8% surge underscores its rapid capture of mobile-first audiences. In the U.S., Threads' 15.3 million mobile users now rival X's 22.9 million, with iOS metrics showing a near-tie (13.1 million vs. 15.3 million). This shift reflects a broader trend: users increasingly prioritize mobile convenience over desktop-centric platforms like X, which still commands 145.8 million daily web visits globally.

Meta's strategic advantage lies in its ecosystem integration. Threads' seamless access to Instagram and Facebook users—many of whom are already embedded in Meta's ad network—has accelerated adoption. Features like direct messages, AI-enhanced feeds, and fediverse integrations further differentiate Threads from X's pay-to-play model, where visibility is increasingly reserved for verified users and premium subscribers.

Monetization: AI as the New Currency

Meta's Q2 2025 earnings report revealed a 21% year-over-year ad revenue increase to $46.6 billion, driven by AI-powered ad optimization. While Threads' ad integration is still nascent, the platform's early monetization efforts—such as Feed ads and AI-driven targeting—align with Meta's broader strategy to replicate Instagram's success. The company's AI models, including Andromeda and Lattice, have boosted ad conversions by 5% on Instagram and 3% on Facebook, suggesting similar gains could materialize on Threads as engagement scales.

However, Threads' monetization faces hurdles. Its web traffic remains minuscule compared to X's 33.1 million U.S. daily visits, and ad supply is limited. CEO Mark Zuckerberg has cautiously framed Threads as a “long-term play,” emphasizing that meaningful revenue contributions are years away. For now, Meta's ad growth relies on established platforms, with WhatsApp and Messenger also testing new formats like Channel Subscriptions.

The Fragmented Market: TikTok, Snapchat, and the AI Disruption

The 2025 social media ecosystem is defined by fragmentation. TikTok dominates short-form video with 39.7% of brands prioritizing its platform, while Snapchat's relevance wanes as users migrate to TikTok's dynamic content. X, meanwhile, remains a niche hub for B2B and crypto communities, leveraging its real-time news capabilities despite declining mainstream appeal.

AI is reshaping the competitive landscape. Autonomous agents, such as an AI that created a meme coin and amassed a following, highlight the potential for algorithmic disruption. Marketers are investing heavily in AI tools for content creation and personalization, with 56.7% planning significant 2025 investments. This trend pressures platforms to integrate AI into their monetization strategies, a space where Meta's Lattice and GEM models are gaining traction.

Investment Implications: A Calculated Bet

For investors, Threads' growth represents both opportunity and risk. If Meta can replicate Instagram's ad success on Threads—leveraging its 350 million monthly active users and AI-driven targeting—the platform could become a $10 billion revenue stream by 2027. However, X's entrenched web presence and X Premium's pay-to-play model provide a buffer against immediate disruption.

The broader market dynamics also favor caution. TikTok's dominance in Gen Z engagement and Snapchat's pivot to AR commerce suggest no single platform will dominate. Meta's regulatory risks, including the FTC's antitrust trial, add another layer of uncertainty.

Historically, Meta's stock has shown resilience around earnings events. A backtest of META's performance from 2022 to 2025 reveals that the stock has a 50.00% win rate over three days, 57.14% over 10 days, and 71.43% over 30 days following earnings releases. The maximum observed return of 7.73% on day 58 underscores the potential for price appreciation in the short to medium term. These results suggest that while Threads' monetization timeline remains uncertain, Meta's core business and earnings-driven momentum could provide a reliable foundation for both short-term and long-term investors.

Conclusion: A Tipping Point, Not a Certainty

Threads' surpassing X in daily active users marks a significant milestone, but it is not a guaranteed tipping point for Meta's ad recovery. The platform's monetization success depends on scaling ad inventory, refining AI-driven targeting, and navigating regulatory headwinds. For now, Meta's ad revenue growth is anchored by its core platforms, with Threads serving as a long-term strategic asset.

Investors should adopt a balanced approach: capitalizing on Meta's AI-driven ad momentum while hedging against the fragmented market's volatility. The key is to monitor Threads' monetization progress and Meta's ability to integrate it into its broader ecosystem. In a world where attention is the ultimate currency, the winner will be the platform that best balances innovation, user trust, and advertiser value.