CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Meta plunges over 13% on grim earnings after Nasdaq sinks

Meta stocks fell over 13% in after-hours trading after Q3 earnings; revenue fell for the second straight quarter, and guidance disappoints and Nasdaq to come under more pressure amid broader tech sector misses.

Source: Bloomberg

Meta Platforms Inc, the Facebook parent company, reported third-quarter earnings after the bell on Wednesday.

The social networking and virtual space company saw its revenue decline for a second consecutive quarter, falling to $27.71 billion. That beat the $27.41 Bloomberg consensus forecast, but earnings on a GAAP basis missed the $1.88 EPS estimate, coming in at $1.64, a 13% miss.

Investors shunned the stock in cash trading, with Meta falling 5.59% after Alphabet Inc.—Google’s parent company—and Microsoft posted disappointing earnings before the opening bell. Google fell nearly 10%, and Microsoft shed 7.72%. A rising rate environment is sending capital away from high-beta technology stocks.

Meta provided grim guidance for the fourth quarter, saying they expect revenue at $30 billion to $32.5 billion. An increase in competition from China’s TikTok and changes to Apple's new iPhone privacy measures, along with a broader slowdown in ad spending are seen dampening the company’s sales. Expenses rose more than expected, totaling $22.05 billion versus the $21.23 billion expected. A stronger US dollar weighed on revenue, according to the financial statements: “Had foreign exchange rates remained constant with the third quarter of 2021, revenue would have been $1.79 billion higher.”

Moreover, Reality Labs—a big bet on virtual reality, aka, “the Metaverse” is likely the most potent headwind to the stock price. The CFO Outlook Commentary stated that Reality Labs operating losses will “grow significantly year-over-year.” Elsewhere, daily active users (DAUs) were at 1.98 billion, slightly above the 1.97 billion estimate.

Overall, Meta looks poised to remain under pressure as the company rebrands itself in a difficult operating environment.

Meta – five-minute chart

Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.