| By Andy Swan Digital ads are back, baby. We’ve been pounding the table on a digital advertising resurgence all year long – and that data-driven persistence is paying off. Two rising digital stars led the market this week on the back of solid earnings reports, boasting impressive growth from digital ad dollars. Take a look at this week’s ad spend winners – and see if you notice a trend among the biggest gainers... Snap (SNAP): +14% Snap’s (SNAP) better-than-expected earnings report sparked a 14%-plus surge in its stock, driven by a strong quarterly performance and gains in advertising.
Source: TradingView The company posted adjusted earnings of 8 cents per share on $1.37 billion in revenue, beating expectations and marking a 15% revenue jump year-over-year. With improved AI-driven ad targeting, Snap attracted more marketers to its social media platform, boosting its global average revenue per user to $3.10 and increasing daily active users to 443 million. Reddit (RDDT): +41% ð Rising social media star Reddit (RDDT) far exceeded expectations on its third-quarter report, catapulting its stock an eye-popping 41% in premarket trading on Tuesday.
Source: TradingView The company raked in $348.4 million in revenue, surpassing estimates of $313.6 million. It also turned profitable for the first time since its IPO, posting 16 cents per share against a projected loss of 7 cents. Advertising fueled this growth, generating $315.1 million, while data licensing deals with AI firms contributed an additional $33 million. Though daily active users reached 97.2 million — slightly below estimates — Reddit saw substantial 47% year-over-year user growth. Alphabet (GOOGL): +5% Google’s (GOOGL) advertising revenue came in at $65.85 billion for the third quarter, closely aligning with market expectations.
Source: TradingView The 10.4% year-over-year increase reflects solid performance but a slower growth rate compared to some prior quarters. Search ads contributed the bulk of this revenue, bringing in $49.4 billion, up 12.3% from last year, supported by AI enhancements that helped improve ad relevance and user targeting. Meanwhile, YouTube ads reached $8.92 billion, slightly above forecasts, indicating resilience, despite competition from platforms like TikTok and Netflix (NFLX). Do You Notice a Theme? The up-and-comers have much more room for gains – and they are finally catching up to the big dogs. But luckily for all involved, the rising ad tide is lifting all boats, albeit at different levels. We already saw some moves to the upside for other ad-adjacent names in our portfolios this week, aside from SNAP – including a 3.5% move higher from our brand-new MegaTrends pick (issued earlier this week). Bottom line: As election-related spending and holiday ad demand rise, companies with improving ad experiences, like the one featured in our latest MegaTrends buy alert, and companies with improving, shoppable platforms, are strongly positioned for outsized growth. MegaTrends members received our full breakdown of the next digital ad winners in their Video Bulletin yesterday. If you’re not yet a member, you can go here now to learn how to join today for immediate access to that members-only video report, the new buy alert I mentioned (there’s still time to get in), our model portfolio of 24 open recommendations, and much more. Until next time, Andy Swan
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