Facebook sees shares plummet in wake of brutal tech disaster

Shares in Facebook owner Meta fell to a six-year low last night after the social media giant’s quarterly profit more than halved.

The 13 percent drop in after-hours trading followed a bloodbath for tech stocks on Wall Street amid fears that the economic downturn would bring the sector’s growth to a sharp halt.

Around £2.6 trillion has been wiped from the value of US tech titans this year. The latest fall in Meta’s shares came after it posted a 52 per cent drop in profits to £3.8bn in the three months to the end of September.

Meanwhile, revenue fell for the second quarter in a row by 4 per cent to £23.8bn, although this was better than forecast. Meta boss Mark Zuckerberg (pictured) issued a bleak outlook, saying the company faced “near-term challenges” on revenue while the firm kept a closer eye on its cost base.

The focus on costs followed a scathing letter earlier this week from Meta investor Brad Gerstner, who said the firm should cut staff costs and stop spending so much on its virtual reality “meta universe” projects.

The results added to investor anxiety after gloomy updates from Microsoft and Google owner Alphabet. Microsoft fell 7.7% to $231, while Alphabet fell 9.1% to $95. Apple and Amazon, both of which are due to report results tonight, fell 2 percent to $149 and 4.1 percent to $116, respectively.

The decline also weighed on the tech-heavy Nasdaq, which fell 2 percent to 10,971. The index has lost more than 30 percent of its value this year amid a sector-wide selloff.

Overall, major US tech stocks Netflix, Meta, Amazon, Microsoft, Alphabet and Apple have lost nearly £2.6 trillion combined this year as rising interest rates and falling living costs fueled fears that the tech boom had hit a hard bottom. points. a stop

On Tuesday, Alphabet missed expectations when it reported third-quarter results. The company, which owns YouTube as well as Google, posted a profit of £60bn in the three months to September – short of the £62bn analysts had forecast.

YouTube ad revenue was underwhelming at £6.2bn, compared to the £6.5bn penciled in, as companies cut spending amid economic disarray.

Established players such as Meta and Alphabet have also faced new competition in the advertising space from video-sharing app TikTok, which has grown rapidly and attracted a large and predominantly young audience that is increasingly attractive to marketers.

Meanwhile, Microsoft managed to beat expectations with first-quarter results of £43.7bn, beating previous forecasts of £43.2bn. But investors were spooked by lower-than-expected revenue from the company’s Azure cloud computing business, as well as a weak outlook for the coming months.

One bright spot was Netflix, which cheered markets last week by overcoming a drop in customer numbers and beating Wall Street expectations. Last night, the streaming platform said it had attracted 2.4 million customers between July and September, more than double analysts’ forecasts.