A major headwind for TikTok could be the ultimate tailwind for Meta's Facebook and Instagram

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Congress is inching closer toward a TikTok ban in the U.S. – offering another reason to stay invested in Club holding Meta Platforms after a year-and-half of strong stock gains. Meta's Facebook and Instagram stand to gain if TikTok is cut off in the U.S. and users of the popular short-form video app are forced to redirect their attention elsewhere. That additional time spent on Meta's platforms – and potential advertising dollars that follow – would complement the company's artificial intelligence initiatives and commitment to efficient spending, which have propelled the stock's dramatic rebound from late 2022 lows. "Meta is all about the House bill and TikTok because…you have to put your ads on Reels if you can't get it on TikTok," Jim said Monday during the Club's Morning Meeting . Shares of Meta rose more than 1% Monday, as investors digested the latest out of Washington and prepared for its first-quarter earnings report due out Wednesday evening. META mountain 2022-11-03 Meta's stock performance since Nov. 3, 2022, which marked its lowest close during its dramatic sell-off that year. The House of Representatives on Saturday passed legislation that bans TikTok in the U.S. if its Chinese parent company, ByteDance, does not sell its stake in the app within nine months to a year. The measure – included in a broader foreign aid package for Ukraine, Israel and Taiwan – is now under consideration in the Senate. President Joe Biden has said he would sign if it reached his desk. Critics of TikTok say the app's ownership presents risks to U.S. national security, contending the Chinese government could compel ByteDance to hand over data on its roughly 170 million American users. TikTok CEO Shou Zi Chew has denied that the app shares data with the Chinese Communist Party. The company criticized Congress' latest bill targeting TikTok. "It is unfortunate that the House of Representatives is using the cover of important foreign and humanitarian assistance to once again jam through a ban bill that would trample the free speech rights of 170 million Americans, devastate 7 million businesses, and shutter a platform that contributes $24 billion to the U.S. economy, annually," a TikTok spokesperson said in an email to CNBC. TikTok did not comment on whether it would sue if the legislation passed. However, other media reports suggest the company would embark on a legal fight against the measure. That could complicate the timelines around when the clock on a forced sale would start, if at all. Nevertheless, Wall Street projects that Meta – and, to a lesser extent, fellow Club holding Alphabet – would benefit from a potential TikTok ban. The two companies – already the dominant players in the digital advertising landscape – both have developed short-form video features in recent years to rival TikTok's explosive growth, with Meta's Reels and Alphabet's YouTube Shorts. Meta would be the "primary recipient of redistributed TikTok revenue should the company exit the U.S., with Google the likely number two beneficiary," Wedbush Securities analysts said in a note to clients Monday. In a recent Wedbush consumer survey, 60% of TikTok users who responded said either Facebook or Instagram were their top alternatives if TikTok were to be banned. That was followed by 19% of TikTok users who said they would go to YouTube. Meanwhile, Deutsche Bank said Meta's stock could see more upside in light of a potential TikTok ban. The bank's latest analysis shows that for every 10% of TikTok engagement in the U.S. that shifts to its competitors, Meta would see roughly $19 per share worth of additional value as more consumption is shifted to Instagram and Facebook. That represents about 4% of Meta's $481.07 closing price Friday. Looking ahead to fiscal 2025, the analysts projected that "for every 10% of TikTok's engagement minutes that go to Instagram and Facebook...the company would generate $3.8 billion in incremental revenue." That's about 2% upside to the firm's current estimates. This shift would also result in an additional $1.2 billion for Google's YouTube revenue growth, according to Deutsche Bank analysts. To be sure, they argue the impact to Alphabet's stock price would be "insignificant given the lower relative margins for YouTube, and the fact that the lion's share of the company's value is tied back to Google." Alphabet's companywide revenue in 2025 is projected to be $380 billion, according to consensus estimates compiled by FactSet. After initially being a drag on revenue, Meta has said Reels is now a positive contributor across its apps. More than 2 billion logged-in users watch Shorts each month and "monetization continues to progress nicely," Alphabet's chief business officer, Philipp Schindler, said earlier this year. Both Meta and Alphabet have made massive strides in using AI to optimize advertising performance to help increase engagements on their platforms, bolstering their attractiveness for ad buyers trying to reach a huge audience. We'll get an update on how their AI strategies are doing when Meta reports Wednesday and Alphabet delivers its report Thursday after the closing bell. We'll also look for an update from Meta on its growing business from China-based advertisers . (Jim Cramer's Charitable Trust is long META, GOOGL. See here for a full list of the stocks.) 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