Home » Why the metaverse is good — even if Meta stock says otherwise: analyst

Why the metaverse is good — even if Meta stock says otherwise: analyst

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Goldman Sachs tech analyst says if you want to control the future of the Metaverse, you have no choice but to spend billions building it Eric Sheridan claim.

“Taking a step back from recent equity performance (both year-to-date and aftermarket), Meta’s investments in platform/infrastructure (starting mid-2020) will: a) build independence from volatility; We believe it will continue, in line with the mixed consequences of future mobile OS platform changes, b) a strategic shift towards short-form videos, and the transition from the social graph to the interest graph,” Sheridan said on Thursday. I am writing a note to a client.

Nonetheless, Wall Street continues to have the bones of choosing a digital world created by Mark Zuckerberg called the Metaverse.

Metastock It plunged 22% on Thursday as Facebook and Instagram owners continued to spend aggressively to build out the metaverse. The buildout reduced Meta’s operating margin by 1,600 basis points in the third quarter.

Meta executives suggested that the blistering pace of spending on virtual platforms will continue through 2023. Social media platforms outlined a year-over-year spending increase of about 13% for fiscal year 2023, up from Street 7’s forecast. well above the %.

Morgan Stanley analyst Brian Nowak estimates that Meta could spend a whopping $69 billion in capital expenditures alone over the next two years to support various initiatives, including the Metaverse.

Nowak believes these investments are a signal that “needed structural capital strength will increase” as Meta adjusts for the future. The state of social media after IDFA It is further facilitated by short videos.


The prospects for the meta were also not very good.

Meta’s fourth-quarter earnings outlook was between $30 billion and $32.5 billion, while Wall Street expected $32.2 billion.

Brian Sotzi general editor, Yahoo Finance anchorFollow Sozzi on Twitter @BrianSozzi and LinkedIn.

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