Facebook sees shares dive in brutal tech rout
Owner Meta adds to gloom after Google and Microsoft disappoint
SHARES in Facebook owner Meta fell to a six-year low last night after the social media giant saw its quarterly profits more than halve.
The 13pc slump in after-hours trading followed a bloodbath for tech stocks on Wall Street amid fears an economic downturn would bring growth in the sector to a shuddering halt.
Around £2.6trillion has been wiped off the value of US tech titans so far this year.
The latest plunge in Meta shares came after it posted a 52pc drop in profit to £3.8bn for the three months to the end of September.
Revenues, meanwhile, dipped for the second quarter in a row, down 4pc at £23.8bn, although this was better than forecast.
Meta boss Mark Zuckerberg (pictured) issued a gloomy outlook, saying the company faced ‘near-term challenges’ on revenues while the firm had placed more scrutiny on its cost base.
The focus on spending followed a scathing letter earlier this week from Meta investor Brad Gerstner, who said the firm should reduce staff costs and stop spending so much on its ‘metaverse’ virtual reality projects.
The results increased anxiety among investors following bleak updates from Microsoft and Google owner Alphabet. Microsoft fell 7.7pc to $231 while Alphabet sank 9.1pc to $95. Apple and Amazon, both of which are due to report their results tonight, dropped 2pc to $149 and 4.1pc to $116 respectively. The declines also weighed on the tech- heavy Nasdaq, which was down 2pc at 10,971. The index has lost more than 30pc of its value this year amid the sector-wide sell-off.
Overall, the big US tech stocks, Netflix, Meta, Amazon, Microsoft, Alphabet and Apple have lost nearly £ 2.6trillion combined so far this year as rising interest rates and the cost of living squeeze sparked fears the tech boom has come to a grinding halt.
On Tuesday, Alphabet missed expectations as it delivered its third-quarter results. The company, which owns YouTube as well as Google, pulled in
revenues of £60bn in the three months to September – falling short of the £62bn analysts had predicted. The revenue from
adverts on YouTube underwhelmed, coming in at £6.2bn compared to the £6.5bn pencilled in, as companies cut back on spending in the face of economic turmoil.
Established players such as Meta and Alphabet are also facing renewed competition in the ad space by video sharing app TikTok, which has grown rapidly and attracted a large and predominantly younger audience that is becoming increasingly attractive to marketers.
Meanwhile, Microsoft managed to beat expectations for its first-quarter results as revenue hit £43.7bn, nudging past forecasts of £43.2bn.
But investors were spooked by lower-than- expected revenue from the company’s cloud computing business Azure as well as weak guidance for the months ahead.
One bright spot was Netflix, which last week cheered markets as it reversed a fall in customer numbers and beat Wall Street expectations. The streaming platform said last night it pulled in 2.4m customers between July and September, more than double analysts’ forecasts.