Tech slump fortifies as Metas shares plummet 20% following results

By Ayushi Garg  | Date: October 28, 2022

Tech slump fortifies as Metas shares plummet 20% following results

A bloodbath in American technology stocks deepened as Meta Platforms Inc. shares reportedly plunged by 20% after the Facebook parents expensive metaverse initiatives and the effect of rising inflation on ad consumption alarmed investors.

The tech giant was expected to lose roughly USD 78 billion in market value if losses had continued through the conclusion of the session, contributing to the trillions of dollars that some of the largest tech brands lost this year due to higher interest rates and a stronger dollar.

This year, Metas market worth has dropped by over half a trillion. Its stock price, which was USD 100.55, is the lowest it has been since February 2016. Moreover, the company released its financial results the day after Microsoft Corporation and Google LLC released disappointing financial reports, which sparked a broad sell-off in technology equities.

Sources claim that investors were concerned because Meta is investing in capital-intensive projects at a time when the ad market, a significant source of revenue for the company, is collapsing.

According to Chief Executive Mark Zuckerberg, the business plans to invest roughly USD 10 billion annually in hardware and software for the metaverse. However, he anticipates that it will take about ten years for those investments to pay off.

Even renowned research experts claim that presently, Meta Horizon Worlds is relatively a ghost town in comparison to other 3D immersive worlds like Fortnite and Roblox.

However, it is worth mentioning that companies that specialize in data centers, such as Broadcom Inc., Advanced Micro Devices Inc., and NVIDIA Corporation, may benefit from Metas objectives as their stock price increased by 1.4% to 4.3%.

Nevertheless, things for Meta seem gloomy a year after changing its name to promote the metaverse, a shared virtual environment where users may connect with one another through avatars.

Source Credit:

https://timesofindia.indiatimes.com/business/international-business/tech-rout-widens-as-meta-sinks-over-20-after-results/articleshow/95128563.cms

About Author

Ayushi Garg     ibmag.com

Ayushi Garg

Currently working as an associate content writer, Ayushi pens down insightful articles for several websites. She began her profession by taking classes in digital marketing to broaden her skills. Given her passion for writing, she took up several freelancing projects ...

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