Shares in Facebook owner Meta (FB.O) tumbled 20% in the U.S. premarket on Thursday after the social media giant released a grim forecast blaming Apple’s privacy changes and the rise in of competition.
Meta reported a decline in daily active users from the previous quarter for the first time, as a race with rivals such as TikTok, the video-sharing platform owned by China’s ByteDance, for users to warm up. see More information
The shock, which comes before Amazon’s gains later in the day, spread to Europe, where technology (.SX8P) led sectoral declines with a 2% decline and soured the mood in global financial markets on another busy day. of central bank meetings.
Big U.S. tech companies are under increasing pressure in 2022 as investors expect tightening U.S. Federal Reserve policies to erode the sector’s rich valuations after years of ultra-low interest rates. The Nasdaq (.NDX) is down more than 8% in January, its worst monthly drop since late 2019.
“The downgrade in earnings outlook for Meta and other companies took markets by surprise,” said Kenneth Broux, strategist at Société Générale in London.
“Tech selling spread to broader equity markets this morning and with the Fed preparing to raise interest rates, we could see more volatility in the future.”
European tech heavyweights ASML (ASML.AS), Infineon (IFXGn.DE) and SAP (SAPG.DE) were among the biggest stocks in the region’s STOXX 600 benchmark, down more than 1.5% in which traders saw as a knee-jerk reaction given Facebook’s limited direct reading. Infineon was also penalized for a conservative view.
The disappointment with Meta brought back memories of the tech bubble burst in 2000 and highlights that, after the industry record, investors became highly selective.
According to research firm Vanda, retail investor purchases in late 2020 and early 2021 were focused on expensive tech, EVs, and so-called “meme” stocks. Last week, purchases of large-cap technology soared, while speculative assets saw very little demand.
The so-called FAANG group of Facebook, Amazon, Apple (AAPL.O), Netflix and Google’s Alphabet (GOOGL.O), saw around $4 trillion in market capitalization wiped out in the first few weeks of 2022 as cheaper segments of the markets. become more attractive as central banks reduce stimulus.
Other social media stocks were also hit hard in premarket trading on Thursday, including Twitter (TWTR.N), Pinterest (PINS.N) and Spotify (SPOT.N), which was beset by a misinformation dispute. about vaccination against COVID. also reported disappointing results.
Stock futures on the technology-dominated Nasdaq tumbled as much as 2.4% on Thursday.
Source: CNN Brasil
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