Facebook and Instagram are the most popular social networks on the planet. On a monthly basis, they reach over 3.6 billion people, or nearly half of the world's population. Parent company Meta Platforms has parlayed that competitive edge into a strong position in the digital ad industry, and shareholders have been well compensated. The stock is up 425% in the past decade.

However, Meta now has a market cap of $540 billion and momentum is waning. In the first quarter, the company posted its slowest revenue growth since going public. That doesn't mean the stock won't beat the market in the coming years -- Meta is clearly working to position itself as a key player in the metaverse -- but other social media stocks like Pinterest (PINS -0.36%) and Snap (SNAP 0.65%) may offer more upside.

Here's what you should know.

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Image source: Getty Images.

1. Pinterest

Pinterest is designed for inspiration and productivity. Its platform consists primarily of images and videos, which are curated by brands, influencers, and other users. Drawing on that vast media repository, Pinterest leans on artificial intelligence to surface personalized content for users, helping them discover new products and ideas.

Unlike they do with other social media, people typically come to Pinterest with shopping intent, meaning they are actively looking to buy a new outfit, upgrade their home décor, or plan a backyard barbeque. That differentiating quality makes Pinterest a great place for advertisers to reach consumers.

Unfortunately, after delivering supercharged growth in the early days of the pandemic, Pinterest has struggled to maintain engagement. In the past year, monthly active users dropped 9% to 433 million, though revenue still rose 40% to $2.7 billion and the company generated a GAAP (generally accepted accounting principles) profit of $0.48 per diluted share, up from a loss of $0.06 per diluted share in the prior year.

To accelerate engagement, management is focused on making the platform more actionable. Last year, Pinterest started investing aggressively in video content. It also simplified the catalog upload process for brands and added a shop tab to the search bar. Building on that foundation, the company is testing on-platform transactions, which aim to reduce friction at checkout by allowing consumers to make purchases without leaving Pinterest.

Recently, the company also launched Your Shop in beta, a customized shopping page that surfaces personalized product recommendations for users. Collectively, those initiatives could make Pinterest a bigger player in social commerce and digital advertising, markets that were valued at $585 billion and $490 billion, respectively, in 2021.

In short, Pinterest has a differentiated business model and a big market opportunity. If the company can parlay those qualities into user engagement and financial success, shareholders could see tremendous returns in the years ahead. And with a market cap of $14 billion, Pinterest could grow 35-fold in value and still be smaller than Meta Platforms. From that perspective, I think it's worth buying a few shares of this growth stock.

2. Snap

Snap is the company behind Snapchat, a social app designed for visual communication. Its platform allows people to connect with friends and family through photos and short videos, which can be personalized with millions of augmented reality (AR) lenses. Some lenses (i.e., Scan lenses) also incorporate artificial intelligence (AI), making it possible to discover relevant content. For instance, you scan a picture of a friend's outfit to find the product (or something similar) online.

Snap's use of trendy technologies like AR and AI have made Snapchat popular with younger generations. In fact, 75% of the 13- to 34-year-old population in the U.S. use the app, and that figure actually rises to 90% for the 13- to 24-year-old population. Unlike Pinterest, Snap grew its daily active users 18% to 332 million over the past year. In turn, revenue climbed 57% to $4.4 billion, and Snap generated $203 million in free cash flow, up from a loss of $95 million in the prior year.

Going forward, the future looks bright for Snap. It recently launched catalog-powered shopping lenses, a tool that enables brands to pair product information with Snap's AR try-on technology. That means you can virtually model a pair of sunglasses or a new shade of eyeliner, then move directly to checkout. And it's easy to see how that technology might evolve. With Snap's AR-powered spectacles, you could eventually interact with friends and family, attend class and go to work, or travel anywhere in the world as a virtual avatar.

Here's the big picture: Snap's expertise in AR and AI should help it engage more users over time, and that should draw more ad dollars (and commerce dollars) to the platform. And with a market cap of $38 billion, the company could grow 15-fold in value and still be smaller than Meta Platforms. That's why this growth stock is worth buying.