Rumble Stock: A Millionaire-Maker in the Making?

You've certainly heard of YouTube, but are you familiar with its story? While it's arguably the only user-generated video sharing platform that matters now, this wasn't always the case. In its infancy following its 2005 launch it wasn't clear the platform was going to last. Then when Alphabet's Google acquired the video repository the following year for a whopping $1.65 billion, plenty of critics thought the search engine giant's management was out of its mind.

YouTube now regularly delivers over 1 billion hours' worth of video every day to over 100 million viewers, generating on the order of $36 billion in annual ad revenue as a result. In fact, ratings agency Nielsen reports YouTube is the United States' most-viewed streaming video platform, putting it ahead of Netflix, Walt Disney's Disney+ and Hulu combined, and Amazon Prime. Nothing else quite like it even comes close to matching its draw and results.

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This dominance, of course, helps the platform maintain its dominance. It's been tough for any would-be competitor to gain a toehold in the user-generated video market simply because YouTube's hold on it is as strong as it is deep.

There's an up-and-coming company called Rumble (NASDAQ: RUM), however, that's going to give it shot. If things work out, risk-tolerant shareholders could find themselves sitting on top of an enormous gain.

That's a very big "if" though.

What's Rumble?

The comparison to YouTube isn't a perfect one. While both platforms allow almost anyone to upload nearly any sort of legally permitted video that doesn't violate a minimum of decorum, Rumble tends to host more news and opinion content. It's a popular forum for conspiracy theorists and the alt-right because it's purportedly “immune to cancel culture.”

By and large though, Rumble is becoming the diversified collection of videos one would expect from a site allowing anyone to monetize their video content. Video gaming, cooking, sports, animals, and other lifestyle topics can all be found. The service boasted 67 million unique monthly users and roughly $25 million in revenue during the third quarter of last year, well up from year-earlier comparisons of 58 million and $18 million. That's not bad for a video-sharing site that launched well after YouTube and is attempting to do the unthinkable by making a dent in YouTube's dominance.

Rumble is also (very) unprofitable, and likely to remain that way for at least the foreseeable future. There's the rub, and the reason interested investors might ultimately decide to steer clear.

But what if?

So, you're telling me there's a chance

The 800-pound gorilla in the room is indeed YouTube. Rumble doesn't need to dethrone it; there's room for two or more names in the business. As was noted though, it will need to take at least a small bite out of the bigger player's dominance.

The thing is, it's possible. The key will simply be doing more of what YouTube can't.

That's focusing and specializing, mostly. Whereas YouTube is now home to so many creators and mostly uncurated videos that it's challenging to find something interesting to watch, Rumble is -- so far anyway -- maturing in a way that makes it easier for users to find more of what they want and less of what they don't. This includes exclusive and thoughtfully curated premium content, as well as live streams.

It's also building a platform that advertisers and content creators will like, perhaps learning from YouTube's early missteps. During the company's third-quarter conference call CEO Chris Pavlovski commented, "I feel like the Rumble Advertising Center is in the best place it's ever been." He went on to explain: "We saw traction on Premium move quite nicely once we introduced mid-rolls [ads that play in the middle of a video]. ... Not only did we see the boost on RAC [Rumble Ad Center], but we started to see a boost on Premium, which really created this flywheel in terms of the creator economics in a way that we didn't quite foresee until we introduced those mid-rolls."

And that's just one of a handful of growth hurdles that have only recently been removed headed out of the 2024 and into 2025. Last August's disbanding of the Global Alliance for Responsible Media (GARM), which was effectively leading a boycott against platforms like X (formerly Twitter) and Rumble, for instance, gives advertisers more freedom to promote their brands how and where they wish. They're slowly but surely making their way to this particular video-sharing site. That's why analysts are calling for top-line growth of 21% this year, accelerating from last year's pace near 17%.

In this vein, it would also be shortsighted to not recognize there's a sociocultural movement underway that's more accommodating to platforms like Rumble, some of which have been targeted by the so-called "cancel culture" this company claims to be immune to.

The question remains though: Is Rumble stock a millionaire-making prospect?

Be realistic

Anything's possible. Walmart, Tesla, Nvidia and even the aforementioned Alphabet were also wobbly but scrappy start-ups at one point in time, and then ended up making it big.

Just keep your expectations in check. For every Google there's at least one AltaVista, and for every Facebook there's a MySpace or Google+. It's tough enough to start a viable company. It's even tougher to dethrone a standing industry titan.

That's the long way of saying Rumble could become an unexpected hit, making gutsy shareholders rich in the process. But the likelihood of that happening is too low for most investors to risk making that bet just yet. If you're interested, your best move for now is simply adding it to your watch list and finding something else to take a swing on in the meantime. There are certainly enough names out there currently trading at a discount to choose from.

Should you invest $1,000 in Rumble right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Netflix, Nvidia, Tesla, Walmart, and Walt Disney. The Motley Fool has a disclosure policy.