Twitter Inc (NYSE:TWTR) was buoyed by some good news on Monday after its stocks enjoyed a surge in value, as investors everywhere seem to be lining up behind the social media platform following recent upgrades. After shares spiked upwards by as much as 11.3 percent on Monday, investors are beginning to eye the platform not as something to be written off due to increased competition, but rather as a sound investment that’s not going anywhere soon.
Wall Street loves to tweet
A massive part of Twitter’s Monday-mania can be attributed to a newfound love for the social media platform on Wall Street. J.P. Morgan’s upgrading of the company’s stock to overweight, for instance, triggered a surge of confidence in its future, causing bettors everywhere to buy in while the getting was still good. Alongside of the support it received from analyst, the social media platform has also enjoyed continuous widespread news coverage, in no small part thanks to the prolific tweeting of President Trump.
Whether the president’s fanatic usage of the social media platform is behind the so-called “saving” of Twitter’s stock or not remains to be seen, but the fact that Twitter is now a household name virtually everywhere in the world because of it certainly hasn’t hurt it. More likely, investor’s recent confidence in Twitter is probably based on the fact that the company is rapidly hurtling towards what is most likely to be an extraordinarily strong 2018.
For much of the past few years, Twitter hasn’t been given the benefit of the doubt it’s now enjoying. The company has faced fierce competition from other social media giants, like Facebook (NASDAQ:FB) and its client-platform Instagram, and scandals like the lack of diversity within the company’s halls dogged it for some time. Nonetheless, with recent platform changes like an upped character-count per tweet seeming to have been received well by its userbase, Twitter appears to be churning towards a rosy future for the first time in many years.
Recent changes to how Twitter polices content, too, such as its recent purge of white nationalist and other accounts that spew hate speech, appear to have been well received by its userbase and the public alike. Furthermore, the increasing trend amongst today’s social media users to pivot to better video services is expected to increase the platform’s usage and help it retain current users, as many of today’s tweeters find Twitter ideal for keeping themselves up to date on the latest news, much of which is livestreamed.
Pushing the social media market
In the contentious world of today’s social media market, however, Twitter will need to keep innovating and coming up with fresh content if it wants recent rosy news to be anything more than a passing fad. Luckily, the company and its executives appear to have recognized the value in producing more unique content, and investors curious about its future can rest assured that Twitter is continuing to push the limits of what today’s social media companies are expected to provide.
Twitter’s partnering up with Bloomberg to produce the first-ever 24/7 social news network, for instance, likely has many tech-savvy investors eager about the company’s future. Already championed by news junkies, politicians, and corporate PR teams that use it to reach out directly to their customers, Twitter will likely become widely adopted among a more mainstream audience seeking to discern real news from hoaxes as these kinds of services continue to emerge.
At the end of the day, Twitter’s success in the market relies entirely on its capacity to invest in startups and grow its userbase combined with its ability to bring in ad revenue, both of which appear to be on the up right now. While a $27 price target set by J.P. Morgan may seem ambitious to some, Twitter’s ability to monetize its userbase will only continue to grow in the long-term, and competent usage of the metadata it collects from users to better streamline its services will help buoy its share prices in the immediate future.
J.P. Morgan’s confidence in the company is so high, it expects Twitter to be “GAAP profitable” in 2018, and investors everywhere aren’t waiting to take flight with the rest of the flock when it comes to backing the company’s near-future. With shares climbing by some 26 percent in the last 12 weeks alone, too, investors who aren’t eager to jump on the bandwagon can rest assured that Twitter’s surging shares aren’t solely due to J.P. Morgan’s analyst, either. After years of struggling, Twitter’s time in the social media spotlight appears to be rapidly arriving. As extensive tweeting by high-profile politicians and household-name brands continues unabated in the next few years, expect Twitter’s share prices to keep rising as the company pushes the limits of what microblogging can do.