The Supreme Court heard arguments Friday that could decide the future of TikTok in the U.S. If TikTok is indeed banned later this month, there is likely to be ramifications for TikTok competitors such as Meta Platforms and other social media stocks. Another stock to watch is Oracle, which provides cloud services to TikTok.
The Supreme Court heard arguments ahead of the Jan. 19 date that a law banning the short-video app would take effect. Signed by President Joe Biden last spring with bipartisan support, the law requires China-based ByteDance to sell TikTok's U.S. operations to another company. If it doesn't, the app will be banned. TikTok is challenging the law on First Amendment grounds, calling the potential ban an "unprecedented censorship" for the more than 170 million Americans who use the app.
Over more than two hours of oral arguments Friday, the U.S. Solicitor General defended the law as an act of Congress that is in U.S. national security interests. TikTok's attorney argued the law violates free speech and said TikTok resists content manipulation from China. The New York Times reported following the hearing that the Supreme Court "seemed inclined on Friday to uphold" the law, with a decision expected quickly.
Here's what to know about stocks that could be affected by the Supreme Court's eventual ruling:
Meta Stock Potential Boost?
TikTok has proved to be a formidable competitor to Meta's Facebook and Instagram, particularly in capturing time Americans spending scrolling their phones.
That's why analysts at Morgan Stanley said last month that a TikTok ban would bring a "significant time spent and monetization opportunity for competitors." Morgan Stanley analyst Brian Nowak wrote that Meta and YouTube would be the "largest beneficiaries" of the 53 billion if TikTok users direct their time elsewhere.
Meta offers a similar algorithm-driven short-video product in Reels, which is available through Meta's Facebook and Instagram. YouTube hosts YouTube Shorts.
Morgan Stanley also expects some of that time would go to Snapchat, which owned by Snap, as well as Reddit and Pinterest.
There could also be advertising dollars up for grabs. Research firm eMarketer projects that TikTok last year collected $10.4 billion in U.S. ad revenue, roughly 12% of social media ad spending in the U.S. and 3% of the U.S. digital advertising market.
Meta dominates the social media advertising market and trails only Google in market share for overall U.S. digital ad spending, according to eMarketer. The firm projects that Meta and Google, via YouTube, would collect about half of the "dislocated" advertising dollars from TikTok in the case of a ban.
Meta Stock Gains
On the stock market today, Meta stock rose 3% to 629.12 in recent action. Snap is up more than 7% at 12.96 in recent afternoon trades. Reddit stock is down 1.7% at 168.97 while Pinterest is up 1% at 31.19. Shares of Google parent Alphabet are down a fraction at 192.63.
Meta and Snap pushed higher in the afternoon following the hearing while Reddit pared its losses.
Is TikTok Ban Probability Increasing?
Meta analysts have generally taken a wait-and-see approach to a potential TikTok ban. But the view is starting to shift. Piper Sandler analysts wrote to clients early Friday that the odds are increasing. Analyst Thomas Champion wrote that he previously expected a "TikTok reprieve" but there is little time remaining for that to happen.
"The Supreme Court had an opportunity to put a stay on the ban, thereby punting it into (President-Elect Donald) Trump's term, but did not do so," Champion wrote. "The Supreme Court will hear oral arguments today, and the deadline for a ban is 9 days away. We've heard some industry contacts have begun to consider TikTok alternatives."
Champion said Meta and Google stock would benefit most, with AppLovin a "less-discussed" beneficiary.
TikTok Ban Oracle Stock Impact
Meanwhile, TikTok is a customer of Oracle's cloud infrastructure business. The total value of the deal has never been disclosed, however. Evercore ISI analysts estimated last year that TikTok could be worth between $480 million and $800 million in annual revenue for Oracle Cloud Infrastructure, or about 5% of the division's sales.
Oracle warned investors through a regulatory filing in June that a TikTok ban could adversely impact" revenue if Oracle "cannot redeploy that capacity in a timely manner."
Oracle stock rallied 60% last year but is off to a slow start in 2025. The stock is down 2% this month after slipping 9% in December.
Oracle stock was down 4.5% in recent trading, on a Friday when enterprise software stocks were lower broadly.
TikTok Buyers
The law does leave open the option for ByteDance to sell TikTok. So far, the company has appeared resistant to do that. But that hasn't stopped speculation on potential buyers.
Morgan Stanley analysts wrote recently that e-commerce giant Amazon could "make strategic sense" as a potential acquirer. As could Walmart, which previously reached a deal to buy a stake in TikTok in 2020, though the deal was not completed, according to Morgan Stanley analysts. Neither company has publicly expressed interest since the TikTok ban bill passed.
A group formed by billionaire entrepreneur and former Los Angeles Dodgers owner Frank McCourt has made an offer to ByteDance, according to a press release Thursday. The group, called Project Liberty, also has the backing of Shark Tank's Kevin O'Leary. The group has not disclosed the value of its bid.
