After Trump Deal, Can Meta Stock Withstand TikTok’s Onslaught?

Key Points

• Trump's recent executive order surrounding TikTok's U.S. operations could pose a competitive threat to Meta.
• However, markets aren't panicking, and the company is testing out Instagram's key refinements to fend off TikTok.
• Meta shares have performed impressively in despite TikTok competition in the past, and its Instagram changes could actually add upside to shares.

In a big milestone for Meta Platforms NASDAQ: META, the tech giant recently announced that Instagram has now hit 3 billion monthly active users. That’s around 37% of the world’s population of 8.1 billion, demonstrating the platform’s dominance.

Meta has driven huge success at Instagram, leading to astronomical shareholder gains over the past 13 years. Since acquiring Instagram in 2012, the platform has grown from just 100 million users, and Meta shares have risen by around 1,800%.

However, Meta’s competitive position may be coming under fire. President Trump recently signed an executive order to facilitate the American ownership of TikTok’s U.S. operations, a key Instagram competitor. Notably, Oracle NYSE: ORCL co-founder and tech mogul Larry Ellison looks poised to be one of the firm’s owners, potentially increasing the threat to Meta. Below, we’ll detail the threat that TikTok poses to Meta, and what the company is doing to stop it. Ultimately, how worried should investors be about TikTok after Trump's announcement, and can Meta withstand its onslaught?

From the Horse’s Mouth: Meta Says TikTok’s Threat Is Real

Until recently, Meta has been steadfast in showing limited concern when it comes to TikTok. During earnings calls in 2022 and 2023, it repeatedly diverted questions about competition with TikTok. However, Meta’s tune has changed in 2025, with executives making multiple interesting statements regarding the company.

One of these key comments came from the antitrust trial Meta is currently involved in, relating to its acquisition of Instagram. Adam Mosseri, Head of Instagram, said, “TikTok is the fiercest competition we’ve faced during my tenure at the company." He also noted that in 2019, as much as 40% of the decline in Instagram usage was due to the emergence of TikTok.

Executives also discussed TikTok at the Morgan Stanley Technology Conference in May this year. Chief Product Officer Chris Cox said that the goal of Meta’s Instagram Reels offering is to position itself as a contender to the best short-form video platform in the world: TikTok. He also noted that within short-form video, people still use TikTok and Alphabet’s NASDAQ: GOOGL YouTube for several more hours a day than they do Reels.

Clearly, Meta sees TikTok as a daunting threat and feels a significant need to catch up to it in short-form video. With President Trump’s recent executive order, that threat could be growing. However, Meta is working on mitigation strategies, and markets don’t seem overly worried at this point.

Markets Show Muted Reaction to TikTok Deal, Meta Looks to Pivot

Interestingly, Meta shares barely budged when President Trump announced the TikTok deal on Sept. 25. They dropped just 1% the next day and are down only 3% through Oct. 2, suggesting that markets don’t believe the deal significantly affects Meta’s competitive positioning.

Part of this may be due to Meta's move to morph Instagram into the image of TikTok. In South Korea and India, Meta is testing making the Reels page the first thing users see when they open the app. This is exactly how TikTok works, in contrast to Instagram’s classic layout of showing posts from accounts users follow first. If successful, Meta wants to roll out the feature globally.

Meta aims to boost engagement and ad conversions. Buffer data shows Reels reach 122% more users and get 91% more engagement than single-image posts. The goal is to increase Instagram ad value, attracting more advertiser spending. If successful, these changes could benefit investors.

Meta’s Instagram Shift Could Be a Win for Shareholders

Meta is clearly tightening its focus on Reels to accelerate growth and keep TikTok at bay. It remains unknown how much Trump’s deal will affect Meta’s competitive position, but markets appear sanguine right now.

Meta has seen incredible success even in the face of TikTok competition, which rose to prominence in 2018. Since the beginning of 2018, Meta shares are up by more than 300%.

So, becoming bearish on Meta after Trump’s deal doesn’t make sense at this point.

Additionally, Meta’s attempt to “TikTokify” Instagram could add considerable upside to shares if its tests show promising results. Still, TikTok’s U.S. ownership is a very important variable to watch as Meta looks to maintain its social media dominance.

It is possible that the company could address this development in future earnings calls.