Breaking News
Investing Pro 0
New Year’s SALE: Up to 40% OFF InvestingPro+ CLAIM OFFER

Tech rout widens as Meta sinks after results

Stock Markets Oct 27, 2022 05:36PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A logo of Meta Platforms Inc. is seen at its booth, at the Viva Technology conference dedicated to innovation and startups, at Porte de Versailles exhibition center in Paris, France June 17, 2022. REUTERS/Benoit Tessier
 
MSFT
-2.20%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GOOGL
-2.45%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NVDA
-5.91%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AMD
-3.91%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AVGO
-1.61%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
META
-3.08%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

(Reuters) - A carnage in U.S. technology stocks widened on Thursday as shares of Meta Platforms Inc sank 20% after the Facebook (NASDAQ:META) parent's costly metaverse bets and the impact of soaring inflation on ad spending spooked investors.

Meta was set to lose about $78 billion in market value, if losses hold to the end of the session, adding to the trillions of dollars that some of the biggest tech names have shed this year amid rising interest rates and a stronger dollar.

Meta has lost more than half a trillion dollars in market value so far this year. Its shares were trading at $100.55, their lowest since February 2016.

The company's results come a day after Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) posted dismal numbers, sparking a widespread selloff in technology stocks.

Analysts said investors are worried because Meta is spending on capital-intensive projects at a time when the ad market, a major source of revenue for the company, is drying up.

The company expects to spend about $10 billion a year for metaverse hardware and software, with Chief Executive Mark Zuckerberg saying on Wednesday that he expects those investments to take about a decade to bear fruit.

"Meta Horizon Worlds (at present) is a relative ghost town when compared to other 3D immersive worlds like Roblox and Fortnite," said Mike Proulx, research director at Forrester.

CHIP BOON

Meta's aggressive spending on the metaverse, however, is likely to be a boon for one segment of the broader technology sector - chipmakers.

Its plans require capital expenditure for new data centers and infrastructure, said Ben Barringer, analyst at Quilter Cheviot.

Data center-focused companies such as Broadcom (NASDAQ:AVGO) Inc, Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) Corp could get a boost from Meta's plans. Their stocks rose between 1.4% and 4.3%.

But for Meta, things look bleak a year after it changed its name to focus on the metaverse, a shared virtual reality where people can interact with each other through avatars.

So far this year, Reality Labs, the company's metaverse unit, has already lost $9.44 billion in revenue, while last year the unit recorded more than $10 billion in losses.

Meta has predicted that the unit's losses would grow further in 2023 and pledged to "pace" investments after that.

At least 13 brokerages cut their price target on the stock, with J.P. Morgan slashing to a Wall Street low of $115.

Graphic: Meta's Reality Labs continues to sink in losses - https://graphics.reuters.com/META-RESULTS/zgpobwndwvd/chart.png

Tech rout widens as Meta sinks after results
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Casador Del Oso
Casador Del Oso Oct 27, 2022 5:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wait until next quarter.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email