Meta-stock price analysis as advertisers shift their spending on the platform

Meta stock price continued its rally yesterday, rising more than 5% and extending a two-day bullish streak to three. The rally also saw Meta continue to rise for the month, with gains in July now standing at 9%.

The recent rally comes amid reports that Meta is struggling in the market. The main problem plaguing the company today is that advertisers are leaving the platform in droves. According to reports, Meta platform’s dominance in the advertising industry is gradually losing to its competitors as more companies prefer to invest in other digital platforms for their advertisements.

There are also reports that the problems may be much deeper than it appears. For example, analysts expect the Meta platform to see zero growth in the second quarter of this year. This will be the company’s first failure to generate profits. While addressing the issue, Mark Zuckerberg, co-founder of Meta, called the company’s current situation one of the worst recessions it has ever experienced in recent history, according to Reuters.

In what could be seen by many as the company being in a perfect storm, most of its advertisers are not only looking for other alternatives for digital ads, but are also abandoning the platform and migrating to other platforms. shapes.

The latest development is problematic for investors for a number of reasons. First, the lack of revenue growth will likely hit investors’ pockets and possibly cause Meta’s stock price to rally into a downtrend. There are also forecast reports indicating that the company will show 16% growth for the whole of 2022, which will be down from the 37% shown in 2021. This will also have an impact on the company and possibly on his actions.

Meta-stock price analysis

Looking at the chart below, I expect the current uptrend to continue. This despite data showing issues with Meta operations, loss of advertisers and low expected revenue. My analysis is for the next sessions. However, in the long term, I expect Facebook’s problems to become clearer, stock prices will start to decline, and it is highly likely that we will see prices trading below the $150 price level. .

Karen J. Nelson