As the prospect of a ban on TikTok in the U.S. heats up, new waves are lapping at other unsuspecting shores such as single-stock exchange-traded funds (ETFs) tied to leading tech giants including Meta and Alphabet. As the Chinese-owned social media app is not a publicly traded company per se, its probable expulsion from the U.S. market would be a godsend for Meta and Alphabet platforms. The scenario could even present excellent prospects for investors to take advantage of this situation.
TikTok Ban Spurs ETF Activity of Meta and Alphabet
The focus keyphrase, TikTok ban speculation, has directed attention to Meta and Alphabet ETFs, which have skyrocketed as the odds of TikTok’s removal increased. As reported by Polymarket, the probability of a U.S. TikTok ban rose from 32% on January 6 to 75% by January 11 after reports that the Supreme Court appears unlikely to block the ban.
Meta, which owns Facebook and Instagram, and Alphabet, the parent company of YouTube, are considered to be the largest potential winners if TikTok is forced out of the market. Analysts forecast that Meta’s revenue will grow more than 5% starting mid-2025, while Alphabet’s YouTube platform might see a smaller but still meaningful uptick in engagement.
A couple of ETFs, such as Direxion Daily META Bull 2X Shares (METU) and Direxion Daily GOOGL Bull 2X Shares (GGLL), have gained millions of dollars in assets under management with investors reacting to the developing saga of TikTok.
Political and Legal Uncertainty
While momentum for a TikTok ban has surged, it’s far from a foregone conclusion. The law requires TikTok’s parent company, ByteDance, to sell its U.S. operations by January 19 or face a ban. However, incoming President Donald Trump has vowed to intervene, possibly issuing an executive order to delay the ban. Whether such a move would hold legal ground remains unclear, as it would likely face challenges from the courts.
The whole drama is set to be unveiled by the approaching January 19 deadline. Meanwhile, Meta and Alphabet ETFs continue to remain the center of attention for the investors who seek to gain through this ban.
Also, see: US’s ban on TikTok means a $1.3 billion loss to small businesses in one month