What's going on?

Snap and Pinterest both reported better-than-expected results late last week, which means the two of them can celebrate their success in style.

What does this mean?

After Meta�s poor showing last week, investors were worried Snap and Pinterest would suffer the same fate. But there was nothing to stress about: Snap�s augmented reality tools ��which allow users to try on virtual clothes ��attracted advertisers in their droves, helping the company bring in 42% more sales last quarter than the year before. The company even posted its first-ever quarterly profit.

Pinterest�s sales, meanwhile, were up 20%, with retailers spending more on advertising over the holidays. And it one-upped Snap�s inaugural quarterly profit too, boasting its first-ever profitable year. But that�s as far as they differ: both companies gave positive revenue outlooks for this quarter � albeit with caveats�

Why should I care?

For markets: Moving on from Meta.
Snap and Pinterest do have obstacles ahead: they said Apple�s privacy settings � which make it harder to target users with relevant ads � could keep putting advertisers off, while Snap thinks supply shortages could hit marketing budgets. But investors still seem to think they�re a less complicated alternative to Meta, and sent their stocks up 52% and 28% after the update. And the platforms seem to have given them confidence that Twitter will do well when it reports next week too, which might be why they also sent its stock up 10%.

The bigger picture: Older, not wiser.
Another caveat: Snap is still worried about TikTok, which is doing a bang-up job of stealing users� coveted attention span. That could force the company � and the likes of Meta, which has likewise cited TikTok as a concern � to innovate, if not just copy the format. It�s worked for Alphabet, after all: YouTube�s �Shorts� � launched in 2020 � just passed 5 trillion views.