'Technology companies have started to have income reports, the market will be even more uncertain after this.'
The leading social media company of the United States (US), Snap Inc. became the first technology firm to publish its corporate earnings report for the 3rd quarter (Q3).
As a result, Snap reported weaker-than-expected earnings and caused the company to experience a 25% drop in shares during the New York session.
It is understood that Snap's revenue in Q3 was $1.13 billion compared to the market's forecast of $1.14 billion while earnings per share were revised to $0.08.
Despite a 6% increase in revenue compared to the same period last year, it still failed to meet market forecasts.
Also underlined by Snap is the pressure of high global inflation rate has affected the growth of the company's revenue and this matter indirectly casts a shadow of shrinkage in the digital advertising industry.
As proof, shares of digital advertising-based companies such as Meta Platform Inc fell 4% while Alphabet Inc fell 2% and Pinterest Inc plunged 8%.
In the meantime, investors took the input from Snap's corporate report as a bad sign for other digital advertising-based social media companies.
The implementation of an aggressive tightening policy by the Federal Reserve (Fed) in curbing inflation will risk an economic recession and this will put pressure on technology companies to operate.
