The Super Bowl is just days away, and, as usual, it promises to be the year’s biggest sporting event (sorry, Olympics). for Super Bowl stocks, it will also be a big day.
This year, corporate America is forecast to spend more than $500 million advertising during the Super Bowl telecast, with many companies rolling out new and creative spots aimed at winning over the 100 million-plus viewers who are expected to watch this year’s big game between the Los Angeles Rams and Cincinnati Bengals. A 30-second TV advertisement during this year’s Super Bowl costs as much as $7.1 million, according to NBC, which is broadcasting the event.
Americans are also expected to spend $2 billion on chicken wings during the Super Bowl and consume more than 300 million gallons of beer. Plus, a record 31.4 million Americans are expected to place a bet on this year’s Super Bowl, according to the American Gaming Association, which forecasts that more than $7.6 billion will be wagered this coming weekend.
With so much money involved, we though it would be interesting to look at four Super Bowl stocks that could see a Super Bowl advertising bump this year.
Super Bowl Stocks: Meta Platforms (FB)
It’s been a hell of a year so far for the company formerly known as Facebook. After missing on its earnings and issuing disappointing forward guidance, shares of Meta Platforms suffered the biggest one-day loss of value in stock market history. It shed a massive $251 billion of market capitalization in a single trading session and dropping from the fifth-biggest company in the S&P 500 index to No. 7.
FB stock is now down 34% year-to-date. Yet despite the difficulties, redemption could be just around the corner for the social network in the form of a creative Super Bowl event.
It was just announced that Meta Platforms is teaming with the rock band Foo Fighters to host a virtual reality concert immediately after Sunday’s Super Bowl. Audiences will be able to watch front man Dave Grohl and the rest of the Foo Fighters perform rare tracks inside a 180-degree virtual reality concert venue that can only be viewed using Meta’s Quest virtual reality headset. The entire concert will be available live only on Horizon Venues, a virtual reality app available exclusively on Quest headsets.
Not only could the concert help to rehabilitate Meta Platforms and drive sales of its headsets, but it’s also meant to highlight Meta Platform’s development of the metaverse, a virtual world that is largely theoretical at this point.
The only question now is: How much do you like the Foo Fighters?
PepsiCo (PEP)
Not only is PepsiCo one of the biggest advertisers during the Super Bowl, it also sponsors the world famous, much-discussed halftime show.
PepsiCo spent $2 billion to sign an exclusive 10-year deal with the NFL back in 2012 that included sponsorship of the Super Bowl halftime event, as well as other marketing and promotions related to the big game and the entire NFL season. That deal is set to expire after this weekend’s Super Bowl and there are reports that the NFL plans to shop future sponsorship rights to the halftime event on the open market.
Some estimates peg the future value of the Super Bowl halftime show at as much as $50 million per year.
Who runs the Super Bowl halftime show in the future is unknown, of course. But this year, it remains PepsiCo’s event and the company is going all out with an all-star line-up of rappers that includes Dr. Dre, Snoop Dogg and Eminem, among others. And, in addition to the halftime show, PepsiCo is also one of the largest advertisers at the Super Bowl, promoting products ranging from Mountain Dew soda to Doritos chips.
While it’s not known how much PepsiCo is spending on Super Bowl ads this year, in previous years the company has shelled out $40 million to run multiple ads during the game. The beverage and snack company is one of the most visible at the Super Bowl.
Year-to-date, PEP stock is flat. In the last six months, the shares have gained 11%.
Anheuser-Busch (BUD)
Brewery giant Anheuser-Busch is one of the company’s most closely associated with Super Bowl advertisements, and, over the years, the company has produced some of the most iconic ad spots every shown during the game.
Its Budweiser beer ads featuring Clydesdale horses are as familiar to viewers of the Super Bowl as quarterback Tom Brady. In fact, there was a minor uproar last year when Anheuser-Busch chose not to run a Budweiser ad during the Super Bowl for the first time in 37 years.
The company is seeking to make-up for its absence last year with a cinematic ad this year that was filmed by Academy Award-winning director Chloé Zhao, runs for a full minute, and brings back the legendary Clydesdale horses.
Anheuser-Busch also plans to advertise other products during this year’s Super Bowl, including Bud Light and Michelob Ultra beers. In addition to the Budweiser horses, Anheuser-Busch has produced other memorable Super Bowl commercials over the years, including chirping frogs and guys screaming “Whassup!” at one another.
How much Anheuser-Busch is spending this year is not clear. However, the company’s advertising spend, on average, accounts for 10% of total Super Bowl ad revenues. If you were to do the math, 10% of this year’s expected total ad spend of $500 million would be a cool $50 million spent by Anheuser-Busch.
BUD stock is up just more than 1% so far in 2022, and is flat over the last six months.
Super Bowl Stocks: DraftKings (DKNG)
Gambling is a big part of the Super Bowl every year. But this year, wagering on the game is expected to be off the charts due to the fact that several states, notably New York, have recently legalized sports betting.
As mentioned, the American Gaming Association forecasts that $7.6 billion will be bet on the Bengals-Rams game. That’s more than double the $3.3 billion wagered on last year’s Super Bowl between the Tampa Bay Buccaneers and the Kansas City Chiefs.
Sports betting is now legal in 30 states and Washington D.C. In January, a record $1.6 billion was spent on sports betting in New York, the first month in which gambling was legal in the Empire State.
A big beneficiary of the Super Bowl betting is expected to be online sports betting and fantasy football company DraftKings. Boston-based DraftKings is heavily promoting itself in the lead-up to the Super Bowl and trying to draw in gamblers with several big promotions. DraftKings is estimated to be giving away $10 million in free bets and promotions to people who use its app to wager on the Bengals-Rams game, including a $1 million free bet prize on the Super Bowl.
In addition to its various promotions, DraftKings is also one of only two gaming companies advertising during the Super Bowl, the other being Ceasars Entertainment (NASDAQ:CZR). But DraftKings was the first gaming company to book a Super Bowl ad and has released a teaser of the ad called “Fortune Awaits” that implores people to download its app to participate in its “Free Million Dollar Super Bowl LVI Bet” contest.
DKNG stock could use some positive momentum. So far this year, DraftKings share price is down 34%, bringing its loss over the past six months to 54%.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.