© Reuters. Meta Platforms (META) to ‘Dethrone TikTok as King of Short-Form Video,’ states Truist
By Sam Boughedda
In a research note Friday, Truist analyst Youssef Squali said Meta Platforms (NASDAQ:) is likely to dethrone TikTok as the king of short-form video within 18 months.
Squali reiterated a Buy rating and $320 price target on Meta.
“TikTok has leveraged its first mover advantage in short-form video (SFV) as social peers, namely Facebook/Instagram, YouTube and Snapchat were caught flatfooted, and gained share of the global digital ad market. This leadership in SFV is now being challenged by these competitors who are aggressively building engagement and introducing ad products,” said the analyst.
He added that they believe Meta will overtake TikTok (excluding China) in terms of revenue from short-form video by the end of 2023, describing it as “an impressive feat given the newness of its offering.”
He also said YouTube (NASDAQ:) is not far behind building Shorts into the next contender, with Snap (NYSE:) in tow.
“While Meta continues to face meaningful headwinds from macro factors (economic slowdown, inflation, etc), changes to user privacy rules, and an expensive bet on a yet-to-be-proven metaverse, we believe that the headwind of competition, especially from TikTok, is waning,” wrote Squali.
He concluded that “contrary to widely held views, TikTok’s grip on SFV is loosening, that TikTok is no longer ‘eating FB/IG’s lunch,’ but Meta is likely to dethrone TikTok as king of SFV within the next 18 months, in our view.”