Trump Media & Technology Group (DJT -1.93%) began trading in March at a valuation of nearly $7 billion. First it soared, then it plunged as much as 85%, only to rebound. Its market cap now is about $7.5 billion as it picked up steam toward the latter half of 2024 amid the hype surrounding Donald Trump's presidential election campaign and ultimate win.
Now that Trump is set to return to office later this month, could this social media stock soar to new heights in 2025?
Has the excitement surrounding Trump Media diminished?
Trump Media has for the most part been a speculative investment. The stock could often be viewed as a gauge as to how likely it was that the former president would win the next election. When hopes were high, the stock was soaring. When there was more apprehension, the stock wasn't doing so well.
But now that the election is over, interest in the stock appears to be waning, as is evident by the significant decline in trading volume in recent weeks.
DJT 30-Day Average Daily Volume data by YCharts
A lack of interest could be bad news for the stock because it means investors aren't talking about it and there may not be much excitement around it anymore. Trump Media stock arguably is a meme stock given the risk that comes with it.
There isn't much of a reason to invest in the business beyond speculation
Trump Media has a social media application in Truth Social and it has launched a streaming platform, Truth+ TV. But with loads of competing apps and streaming services, the business hasn't proven, not through user numbers or revenue numbers, that there is compelling demand for its offerings -- and that it can make money from them.
Net sales for Trump Media during the period ended Sept. 30 totaled just over $1 million and actually declined from the same period the year before. Meanwhile, the company's operating loss widened from $3 million a year earlier to $23.7 million in its most recent quarter.
The company's fundamentals are abysmal, and its growth prospects are questionable at best. It's still in its early growth stages but the business is unproven at this point and investing in it involves taking on a lot of risk. The stock may be a popular option for Trump fans and supporters, but this is not much of a business today.
It could be a tough year for Trump Media stock
Hype and enthusiasm surrounding Trump's campaign helped rally shares of Trump Media in 2024. But this year, without a clear catalyst around the business, there is a possibility that a correction takes place and that this highly risky stock gives back some of its gains.
Without strong fundamentals, the stock is likely to trade like many meme stocks, which tend to take investors on a roller-coaster ride. For the vast majority of investors, that's going to make this an untenable investment to hold given the uncertainty and risk that comes with it. Its performance may depend on a mix of the company's results, how investors view the economy, and it may even end up being a gauge of the president's approval rating.
But until the company can demonstrate that it has a growing business and advertisers are willing to spend on its platform, the fundamentals will be disappointing and it's going to be hard to justify that this is a business worth anywhere near $7.5 billion -- and that's what should ultimately matter to investors.
