Meta Platforms Earnings Preview

After Meta Platforms reports its latest earnings today, investors will likely focus on the implications of Apple's overhaul of its privacy settings. Based in Menlo Park, California, Meta is the parent company of Facebook, Instagram, and WhatsApp, among other widely used social media platforms. Privacy changes in Apple's iOS operating system have made it harder for social media companies to tailor ads. The changes, first announced in April 2021, require apps to obtain permission to monitor user data. As a result, companies will now have less data to direct ads to appropriate audiences and gain insight into how well those ads are performing. In October, Snap (NYSE:SNAP) stated that Apple blamed these changes for the expected slowdown in revenue growth for the fourth quarter. As the pandemic-related ad spend boom slows, the company's CEO Mark Zuckerberg is shifting a significant portion of his resources to create the metaverse—a term used to describe an immersive digital environment where people spend time together in virtual worlds. Goldman Sachs analyst Eric Sheridan said he sees Meta as a long-term secular winner for the metadatabase and is well positioned to capitalize on the next wave of computing. Meta Platforms earnings may come under pressure, particularly due to Apple's new privacy settings and slowing digital advertising spending. However, any fall in share prices should be seen as an opportunity for investors.