Social media companies have gained massive traction in the past decade, driven by the worldwide shift towards digitalization. These platforms allow users to connect with friends, celebrities to connect with fans, governments to connect with the masses, and job seekers to connect with employers.

Last year, former U.S. President Donald Trump launched a social media platform called Truth Social and a streaming platform called TMTG+. The two services will be provided by Trump Media & Technology, an entity that went public via a SPAC merger with Digital World Acquisition Group (NASDAQ: DWAC). So, DWAC is a blank-check company and will infuse capital into the combined entity for an equity stake.

Since mid-October, DWAC shares have gained around 800% valuing the company at a market cap of $3 billion. However, Trump Media & Technology is still pre-revenue, making it a highly speculative bet right now.

The Truth Social platform is expected to debut on February 21, suggesting DWAC stock might be volatile leading up to the launch. Truth Social will have to attract a user base that is substantial, highly engaged, and that can be later monetized.

Given the company's uncertainties, you can buy another quality social media stock instead.

Meta Platforms

The largest social-media company globally, Meta Platforms (NASDAQ: FB), formerly known as Facebook, lost 26% in market cap after its Q4 results were announced. But the pullback offers investors an opportunity to buy the dip.

Investors should note that Meta Platforms enjoys a wide economic moat and is the second-largest digital ad platform in the world, after Alphabet. The Facebook platform itself attracts close to three billion people each month, accounting for more than a third of the global populace. 

Additionally, Meta Platforms has pumped in billions of dollars to acquire Instagram and WhatsApp in the last few years, to expand its user base and maintain a leadership position in this vertical. 

Meta Platforms has allocated vast sums of capital to build the metaverse, a virtual universe where users can exist as digital avatars. It has already reported cumulative net losses amounting to $21.2 billion in the last three years to develop the metaverse.

A Bloomberg report forecasts the metaverse segment to be valued at $1.6 trillion by 2030, up from $800 billion in 2024. So, even if Meta Platforms can account for 5% of the metaverse space, it will help the company generate an additional $40 billion in sales in 2024. 

It would be foolish to bet against Meta Platforms, given the tech giant has increased sales at an annual rate of 41% in the last decade. Moreover, its adjusted earnings have grown impressively by 40% each year since 2011.

The decline in FB stock shaved off $251 billion in market cap for Meta Platforms. But Wall Street expects the company's sales to rise by 14.5% to $135 billion in 2022 and by 17.2% to $158.3 billion. Its adjusted earnings are forecast to touch $15.84 in 2023, up from $13.77 in 2021. So FB stock is valued at a forward price to earnings multiple of just 15x, making it one of the cheapest growth stocks right now.