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BanningTikTok

What it means for the rest of the market

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Meet the TikStocks

A TikTok ban could affect a wide variety of companies

Rebecca Moretti, Rani Molla

4/23/24 3:14PM

The likelihood of a US TikTok ban is higher than ever.

Last Thursday, the House of Representatives fast-tracked a bipartisan effort that could lead to Gen Z’s favorite app being banned in the US, and over the weekend, the House approved the bill.

The revised legislation ties TikTok’s fate to a foreign-aid package for Ukraine and Israel. The Senate passed its biggest procedural hurdle Tuesday afternoon in an 80-19 vote. The bill will get a final vote shortly, likely sending it to President Biden’s desk, where Biden said he’d sign it.

If it goes through, it would force TikTok’s Chinese parent, ByteDance, to separate from the app within a year or be banned in the States. This doesn’t necessarily mean a ban is imminent, but it means that the president will have a great deal of leverage to make the sale happen in the foreseeable future.

Supporters say the bill’s necessary to protect American data from the Chinese government. TikTok and other critics argue it would curb free-expression rights for 170M American TikTok users.

The Tik-ban saga’s long: US leaders have been trying to ban the addictive app since 2020. But now things are moving fast. Here are some companies that could be affected by a TikTok ban, based on how they mention the app in earnings transcripts and filings as either friend or foe.

Social media: Meta, Snap, and others

If the TikTok economy collapses, it’ll be a major win for rivals Meta, Google, and Snap, who each have TikTok copycats ready to step in (Reels, YouTube Shorts, and Spotlight). TikTok’s popularity among Americans has grown faster than any other social platform, and if it vanishes, its 170M US users would likely move to its rivals. TikTok’s often cited as a risk factor in social giants’ earnings:

Meta: “User growth and engagement are also impacted by a number of other factors, including competitive products and services, such as TikTok, that have reduced some users' engagement with our products and services.”
Snap: “We compete with other companies in every aspect of our business, particularly with companies that focus on mobile engagement and advertising. Many of these companies, such as Alphabet (including Google and YouTube), Apple, ByteDance (including TikTok), Meta (including Facebook, Instagram, Threads, and WhatsApp), Pinterest, and X (formerly Twitter), may have greater financial and human resources and, in some cases, larger user bases.”

Beauty: Elf, L’Oréal, Coty, Ulta, Clinique, and others

These days, beauty companies are heavily reliant on social media (especially TikTok) to gain viral traction for their products — from Clinique’s Black Honey Lipstick and Elf’s liquid filter foundation to Coty’s Kylie Cosmetics. If a ban happens, it could dent beauty marketing:

Elf: “We're one of the first beauty brands on TikTok, where we — our first hashtag challenge, I think had something like 3 billion views well before most people knew what TikTok was… So, our ability to go deep in a particular platform, be native in terms of how people are using it, is one of our key strengths.”
L’Oréal’s March report: “L’Oréal is no. 1 in influencer market share (+5.5 points compared to 2022 to the end of November 2023), boosted by strong leadership and increased TikTok.”
L’Oréal’s February earnings call: “There's like an appetite for beauty. And on TikTok is by far the number one category. And I think the number of video views have doubled in 2023. So, there is this appetite.”
Ulta: “In December, we surpassed 1 million followers on TikTok reinforcing our position as a social brand leader in beauty.”

…retail in general

Just like with beauty marketing, TikTok has played an important role in growth for Gen Z popular apparel brands like Revolve and Crocs, as well as old-school retailers like Target and Walgreens. It plays a key part in customer-acquisition strategies and is often cited as a growth driver on corporate earnings calls:

Revolve: “We had a really phenomenal quarter, in part driven by a TikTok Shop, that was really successful for us in the quarter.”
Crocs: “In August, we dropped our fourth Lightning McQueen Adult Clog with strong — with a very strong unveil on TikTok, garnering approximately 38 million views, our best-performing TikTok ever.”
Walgreens: “We had a TikTok influencer put something up about peeled mango gummies, and we can't keep them in stock now.”

Music: UMG, Sony, and Warner

Vertical dances and lip-sync vids are big business. Record labels have grown increasingly reliant on TikTok for the success of their songs, and are even tailoring tunes to what they think will go viral. Without that exposure, they could lose $$. But one record label said it could live without it: after TikTok and Universal Music Group failed to agree on royalty payments, TikTok removed all music from UMG artists like T. Swift and Drake. UMG’s focusing on other platforms:

UMG: “With regard to TikTok, we've disclosed that our former deal generated about 1% of total UMG annual revenue. Because other platforms in the social video category achieved much greater monetization, we're focused on accelerating our partnerships with YouTube, Meta, Snap and others and we look forward to updating you in the coming weeks ahead about exciting competitive developments and incremental opportunities emerging within the category.”
Warner Music: “We hope that UMG and TikTok come to a resolution and a good collaboration that's healthy for the ecosystem. To the extent that there's greater prominence on TikTok like greater prominence is a good thing. TikTok is a great marketing and promotion platform and tool.”

With the biggest hurdles cleared, we’re a vote away from it being basically just up to Biden as to whether these companies will have a whole lot more to talk about soon.

Luke Kawa53m

Texas Instruments soars as Q1 guidance exceeds estimates and CEO touts “a lot of room to go” on industrial recovery

Texas Instruments soared in after-hours trading as better than expected Q1 guidance outweighed a mediocre set of Q4 results.

The chipmaker sees current quarter sales ranging between $4.32 billion to $4.62 billion, the midpoint of which is slightly north of the consensus estimate for $4.42 billion. The outlook for earnings per share of $1.22 to $1.48 also compares favorably to Wall Street’s call for $1.26.

For Q4, sales of $4.42 billion were a tad below the consensus call for $4.43 billion, while earnings per share of $1.27 came in three cents light of the Street’s view. However, earnings per share included a six-cent hit that was not incorporated into the company’s guidance, Texas Instruments said.

Managing expectations had not been Texas Instruments’ strong suit as of late: the stock sank after the firm reported Q3 results since Q4 guidance was weak. And during the conference call that followed Q2 earnings, three separate analysts remarked that CEO Haviv Ilan’s “tone” wasn’t too upbeat despite better than expected financials and decent guidance.

This time, the outlook and commentary is all sunshine and rainbows.

“The first quarter guidance is significantly stronger than seasonal,” remarked Deutsche Bank analyst Ross Seymore. “And if my math is right, it seems like it's the first time you've guided up sequentially since right after the financial crisis 15 years ago, roughly.”

Ilan credited this to a persistent recovery in industrial demand, which accounts for about one third of the company’s sales.

“Remember that on the industrial market, we still have a lot of room to go when you think about the previous peaks,” he said. “So, if you will, the compare, it's still easy for industrial to continue to recover.”

And then, of course, there’s AI. Data center revenues are a small but briskly growing part of TI’s business, accounting for 9% of sales for the full year while surging roughly 70% year-on-year in Q4.

Seagate beats expectations on sales and EPS

The guidance was strong, too.

Matt Phillips4h

Tasha Matsumoto

S&P 500 climbs to new all-time high ahead of Big Tech earnings

Meta, Microsoft, and Tesla will report after the bell tomorrow.

Matt Phillips6h

Satellite stocks surge on “sovereign space” plans

Planet Labs is on pace to notch its second 10% gain of the month early Tuesday afternoon, adding to its astronomical run of more than 500% over the last 12 months.

Wedbush Securities tech analyst Dan Ives hiked his price target for the stock to $30 from $28 after hosting a series of meetings with the company and investors in California. Ives wrote:

“[Planet Labs] is seeing massive success through its improved GTM selling motion as the company is providing mission-critical use cases for a wide array of government applications with defense & intelligence, with more international agencies seeing the value in PL’s satellite fleet for situational and maritime domain awareness in real-time as the company is benefitting from increasing defense budgets and the urgent need for international countries to reduce its reliance on the US.”

That commentary is consistent with recent news reports that the German military is planning to build what the Financial Times calls the “the equivalent of Elon Musk’s internet service for the German armed forces.”

A separate report in The Wall Street Journal on Monday said, “Spending on space-related projects is expected to rise in many countries, giving companies new opportunities to sell their wares and services.”

Behind this push, in part, is the fact that the roughly 80-year-old NATO alliance is is under unprecedented strain due to, among other things, US President Donald Trump’s fixation on somehow acquiring the Danish territory of Greenland.

Other space plays seem to be benefiting from similar dynamics, with Rocket Lab and AST SpaceMobile both up solidly on the day.

Governments’ New Must-Have: Their Own Satellites

“[Planet Labs] is seeing massive success through its improved GTM selling motion as the company is providing mission-critical use cases for a wide array of government applications with defense & intelligence, with more international agencies seeing the value in PL’s satellite fleet for situational and maritime domain awareness in real-time as the company is benefitting from increasing defense budgets and the urgent need for international countries to reduce its reliance on the US.”

Other space plays seem to be benefiting from similar dynamics, with Rocket Lab and AST SpaceMobile both up solidly on the day.

Matt Phillips9h

Corning-Meta deal reignites optical connections trade

Corning’s $6 billion deal with Meta to provide fiber-optic cable connections for its AI data centers is reigniting an AI-related trade that’s been stalled out over the last month.

Fellow opto-electrical makers of plugs, cables, and various doodads needed to connect data center servers — such as Amphenol, Coherent, and Lumentum — are also soaring Tuesday.

Such stocks ripped in the second half of 2025 before the rally sputtered out in the first half of December. But the amount of money Meta plans to shower on Corning has clearly cheered up competitors — and investors — in the space today.