Meta Platforms vs. Snap: Which Social Media Stock Has an Edge?

Meta Platforms META and Snap SNAP are well-known providers of social media platforms. META through Facebook, WhatsApp, Instagram, Messenger, and Threads reaches 3.48 billion people globally, while Snap’s flagship Snapchat is now used by more than 900 million monthly active users. Both companies are infusing AI into their offerings, thereby driving user engagement, which is attracting advertisers, thereby boosting advertising revenue growth. 

Per the latest dentsu Global Ad Spend Forecasts report, global ad spending is expected to grow 4.9% in 2025 to hit $992 billion, while digital ad spend is anticipated to grow 7.9% to $678.7 billion. So, META or SNAP, which social media stock is well-positioned to benefit from this spending momentum?

The Case for Meta Platforms Stock

Meta Platforms’ focus on improving advertisers’ return on ad spending has been a key catalyst. Its proprietary machine learning system, Andromeda, for retrieval in ad recommendation is powered by NVIDIA. AI is helping META become better at targeting and finding the right audience for advertisers. Advertisers globally can now run video and image ads to Threads users in most countries, including the United States. In the second quarter of 2025, an AI-powered recommendation model drove 5% more ad conversions on Instagram and 3% on Facebook. 

AI push is helping Meta Platforms offer content that is interesting and useful, eventually driving engagement. Improvement in content quality, driven by META’s recommendation system, has led to a 5% increase in time spent on Facebook and 6% on Instagram in the second quarter of 2025. Video engagement improved with Instagram video time jumping more than 20% year-over-year globally. Video time spent on Facebook surged more than 20% year over year. The launch of AI video editing tools across Meta AI and the new Edits app are noteworthy developments.

Meta AI now has more than a billion monthly active users and is available in more than 200 countries and territories. Meta Platforms is focusing on making Meta AI the leading personal AI. The company sees strong momentum with Ray-Ban Meta glasses, with sales accelerating.

META’s initiative to boost user engagement is expected to drive up the user base, aiding advertising revenues. The Zacks Consensus Estimate for third-quarter 2025 advertising is pegged at $48.44 billion, indicating more than 21% growth over the figure reported in the year-ago quarter.

The Case for SNAP Stock

Snap’s advertising platform is evolving with commerce-driven ad volume growing 39% year over year in the second quarter, and newer ad formats such as Sponsored Snaps are delivering stronger conversion outcomes. With campaign tools improving measurability and efficiency, Snap is seeing broader advertiser adoption.

Snap continues to evolve as a visual-first social media platform with strong traction among Gen Z users. Its global user base continues to expand, reaching 469 million Daily Active Users during the second quarter of 2025, up 8.6% year over year. 

Premium experiences remain a key catalyst to Snap’s engagement strategy. The Snapchat+ subscriber base approached 16 million in the second quarter of 2025, supported by new offerings like Lens+, which gives access to AI-powered video effects and exclusive features. Snap’s AR tools, including Camera Kit and Spectacles, continue to differentiate it from its peers by enabling immersive experiences across both consumer and enterprise use cases.

META’s Earnings Estimate Revisions Positive, SNAP’s Steady

The Zacks Consensus Estimate for META’s 2025 earnings is pegged at $28.13 per share, up 0.5% over the past 30 days, indicating a 17.9% increase over 2024’s reported figure.
 

Meta Platforms, Inc. Price and Consensus

Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote

The consensus mark for Snap’s 2025 earnings has been steady at 25 cents per share over the past 30 days, suggesting a 13.79% decline over 2024’s reported figure.

Snap Inc. Price and Consensus

Snap Inc. price-consensus-chart | Snap Inc. Quote

Price Performance and Valuation: META vs. SNAP

Meta Platforms shares have outperformed Snap year to date. While META shares have appreciated 33%, Snap has dropped 28.1%.

META and SNAP Stock’s Performance

Both Meta Platforms and Snap are overvalued, as suggested by the Value Score of D and F, respectively. 

In terms of forward 12-month Price/Sales, Meta Platforms shares are trading at 8.99X, higher than Snap’s 2.06X.

SNAP and META Valuation

Conclusion

Both Meta Platforms and Snap are expected to benefit from a rise in digital ad spending. Although each of the stocks carries a Zacks Rank #3 (Hold), Meta Platforms’ huge user base, AI initiatives and rising earnings estimates give the META stock an edge over Snap. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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