Stock in Facebook parent company Meta Platforms (META) is maturing as the tech company spends money making virtual reality hardware, building awareness and finding partners in the future.
As companies restructure spending amid macroeconomic challenges, their clients’ ad budgets are shrinking – leading analysts to say that meta platforms’ third quarter is ‘make or break’.
“I think the stock has come back to the question and really comes down to fundamentals,” AB Bernstein senior analyst Mark Shmulik told Yahoo Finance. “People can understand that. [the metaverse] As an additional long-term initiative. I think investors would like to spend a lot less on it.
Advertisers run digital marketing campaigns where they have the biggest audience, potential and conversion rates – for a decade, meta affiliates Facebook and Instagram have been in that space. In times of macroeconomic uncertainty, corporate budgeting can make ad spending more visible than actual sales.
“The macro environment continues to deteriorate. We think a lot of ad-driven companies will miss their fourth quarter revenue,” Laura Martin, senior analyst at Needham, told Yahoo Finance. And this will continue to happen.”
According to a study by Piper Sandler, Tik Tok is the most popular social media app among young people, with the margin widening only when compared to Facebook and Instagram, the company that owns ByteDance.
“I think Mark Zuckerberg is telling us that he doesn’t think he has a major job,” Martin said. “He’s moving to Rails because he’s competing with TikTok. He’s moving to Metaverse, and he’s rebranded this company, which he built 15 years ago told me he doesn’t think it’s a business anymore.”
Finding legs in the metaverse
Facebook has spent $10 billion in an initial effort to build Metaverse by 2021, and Mark Zuckerberg announced in 2016 that Through 2022, the company has announced that it will continue to spend heavily on creating Metaverse and will bleed the money for three to five years.
The biggest bet is on Meta Meta’s ability to sell a variety of experience hardware and have a reason to stay there.
“If you look at the motivations behind it, we’ve made these changes from desktop to mobile in the past,” Shmulik said, “and so they [Meta] At some point, he realized there was going to be another computing platform change. You don’t want to be stuck in the application layer.”
At Meta Connect, Facebook founder and CEO Mark Zuckerberg introduced a $1,500 VR headset, with existing plans for many popular workplace collaboration apps to begin participating in the Metaverse.
Accenture, Agula and Microsoft have also announced that they have dubious partnerships with meta platforms. Microsoft offers a significant companion in virtual reality with its commitment to bringing its productivity tools and gaming cloud technology to the experience.
“I think what he’s saying in terms of changing the world of computing for consumers is really innovative and exciting and risky, but bringing in the CEO of both Microsoft and Accenture yesterday? That’s great — he said he has some great corporate partners,” Martin said. . “And I don’t think consumers want to pay $1,500. I think that’s different. But I think Accenture will pay thousands to buy $1,500 glasses.”
Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter. @thebradsmith.
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