Meta shares plummet nearly 25% to $247 after disappointing quarterly results from the company.
The social media giant posted a drop in the number of daily active users from the previous quarter for the first time, as the race for users with rivals like TikTok, the video-sharing platform owned by China’s ByteDance, intensifies. .
The revenue forecast for the first quarter is between $27 billion and $29 billion, lower than the $30.15 billion expected by analysts, according to IBES data from Refinitive.
Apple’s changes to its operating software give its users a preference to allow their online activity to be tracked, making it harder for data-driven advertisers to develop new products and learn about their market.
The sharp plunge, which comes before Amazon is due to report results later in the day, extended to Europe, where tech led sector declines, while souring the mood in global financial markets, in a day intense number of central bank meetings.
US tech majors have come under increasing pressure in 2022 as investors expect the Federal Reserve’s policy tightening to erode the sector’s rich valuations after years of ultra-low interest rates. The Nasdaq lost more than 8% in January, its worst monthly drop since the end of 2019.
“The lowering of earnings prospects by Meta and other companies caught the markets by surprise,” said Kenneth Broux, a strategist at Société Générale in London. “Technology selling spread to broader equity markets this morning and with the Fed preparing to raise interest rates, we could see more volatility going forward.”
The disappointment around Meta was reminiscent of the bursting of the tech bubble in 2000 and showed that, after the sector’s record run, investors have become very selective.
The so-called FAANG group – Alphabet’s Facebook, Amazon, Apple, Netflix and Google – has seen some $400bn of market capitalization evaporate in the first weeks of 2022, as the cheapest segments of the markets have become more attractive as central banks reduce stimulus.
Source: Ambito
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