Morgan Stanley analyzes what TikTok’s fate could mean for Big Tech Cap as likelihood of ban/sale looms

Morgan Stanley on Thursday analyzed how companies across tech and retail could be impacted as the probability of a TikTok (BDNCE) ban or its forced sale becomes more of a reality.

The research firm thinks Meta (NASDAQ:META) and Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) YouTube would be the largest beneficiaries if TikTok gets banned.

They have noted press reports that content creators have started discussing their move to Instagram and YouTube but also think Snap Inc. (NYSE:SNAP), Reddit (NYSE:RDDT), and Pinterest (NYSE:PINS) may see some benefits from this given the large number of hours potentially up for grabs.

A recent report from Pew Research showed YouTube was the most used online platform; among nine in ten teens in 2024, slightly down from 95% in 2022.

The Pew report said TikTok, Instagram, and Snapchat remain widely used among teens; roughly six in ten teens say they use TikTok and Instagram, and 55% say the same for Snapchat.

MS analysts think a potential acquisition of TikTok by Amazon (NASDAQ:AMZN) could make strategic sense for the e-commerce and tech giant. They think the company’s delivery fulfillment and logistics capabilities can leverage TikTok’s leading social platform capabilities.

The research firm even revisited the possibility of Microsoft (NASDAQ:MSFT) buying the short video content app, like it tried to back in 2020, but remains unsure if the tech giant would pursue a bid. Back then, the company expressed interest in TikTok, seeing it as a strong fit and as a social, cloud-based service built around design and AI. ByteDance ultimately rejected its proposal.

Walmart (NYSE:WMT), which was also interested back in 2020, could also leverage TikTok across its omnichannel platform, which can contribute to its rapidly growing advertising business, MS analysts said. They believe any potential tie-up could translate into greater sales and advertising impressions for the retail giant.

“Walmart’s advertising business and 3P marketplace have meaningfully expanded since 2020, and thus TikTok’s value to WMT could arguably be even greater today. TikTok could be seen as a good fit for Walmart’s marketplace as it could potentially give sellers a complete omnichannel solution… TikTok could give advertisers on Walmart Connect even more visibility, greater touch points, and a higher return on spend,” Morgan Stanley said on Thursday.

They think the likelihood of Oracle (NYSE:ORCL), which at one point was tentatively approved to acquire a stake together with Walmart, bidding for TikTok is limited.