We are in a very strange market currently…

Wall Street doesn’t know whether they want to pay attention to actual earnings or the macroeconomic conditions surrounding it.

Just take a look at what happened with Meta yesterday…

The company reported absolutely stellar earnings.

They beat on pretty much every metric you can imagine including: 

• Revenue
• Average revenue per user
• Daily active users
• Earnings per share

With that said, it still didn’t matter in the end!

The stock dipped massively after Meta’s CFO threw some caution around the instability in the Middle East and how that could affect advertising revenues…

While it is true that Snap also made similar comments during their earnings call, I think that the situation is being blown out of proportion.

If we look at Meta’s advertising revenue by region, we can see that it makes up only a tiny fraction of the overall pie!

The total advertising revenue for Q1 2023 was around $28 billion.

The “rest of the world” made up only 11.49% of that.

Mind you, that also includes other regions such as South America and Africa.

This means that the Middle East likely makes up only around 3% of the total advertising revenue for Meta! 

While this certainly isn’t something to ignore, I also don’t think it’s big enough to warrant a complete override of everything that Mark Zuckerberg and Meta have shown to investors this quarter…

That’s all for now folks…

Until Next Time,

-Damian