Investing.com - Facebook fell out of favor, for Monday at least, after Wall Street turned bearish on the stock, while Apple's launch of new products boosted sentiment ahead of an event next week where the iPhone maker is expected to unveil a big bet on original content.
Facebook (NASDAQ:FB) fell more than 3% as Needham downgraded the social media giant from a buy to a hold rating amid worries the financial impact of the pivot towards privacy and encrypted messages, as well as growing regulation risks, may hamper the company's ability to monetize its data. The stock has been enjoying a 22% rebound this year from the hammering it took in 2018, but it is still trading some 27% below its 52-week high.
Bank of America echoed Needham's bearish view on Facebook, cutting its price target on the stock to $187 from $205 on worries that a move toward "a more privacy-centric platform could raise questions on three-year growth."
The apparent pivot toward privacy comes as the company has faced backlash over numerous privacy scandals, prompting top-level executives to leave.
Two top executives including Chief Product Officer Chris Cox, one of CEO Mark Zuckerberg's top deputies, will leave the social media network, according to reports last week. The social media firm is also set to lose WhatsApp Vice President Chris Daniels.
Apple (NASDAQ:AAPL), meanwhile, held a 0.9% gain after launching a new 10.5-inch iPad Air and an iPad mini with Pencil support. Both iPads come in 64GB and 256GB variations and are expected to hit stores next week.
The release of new iPads comes just a week ahead of the tech giant's event on March 25, when it is expected to launch a television and video service in a bid to bolster its services revenue and reduce its reliance on iPhones, which generate about 60% of total revenue.
"We raise our 12-month target price to $210 from $195 on a price over earnings of 16.1 times our 2020 view, above AAPL's ten-year historical forward average of 15.2x, warranted, we think, to reflect AAPL's ongoing shift to services," CFRA said in a note. "We believe that AAPL's entry into video streaming will pave the way for greater services offerings (e.g. video streaming, magazine subscription, gaming, healthcare)."