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US stock futures rose in early morning trading as quarterly results from Snapchat, Pinterest, Amazon surpass Meta’s earlier poor showing.
US stock futures surged during Friday’s pre-trading session following a wave of corporate earnings reports. For instance, e-commerce giant Amazon (NASDAQ: AMZN) grew by more than 14%, while image-sharing social media platform Pinterest (NYSE: PINS) jumped by over 20%. In addition, Snap (NYSE: SNAP) saw its stock skyrocket to 62%, its first-ever quarterly net profit.
Futures on the Dow Jones Industrial Average accrued 205 points, or 0.59%, while the S&P 500 futures gained 1.19%. Both results represent regressive outlooks for the two indexes. For the S&P, it translates to a 2.4% slide, which is its worst in almost a year. Meanwhile, for the DIJA, it represents a fall of 518.7 points. On the NASDAQ side of things, the story was a bit mixed. The NASDAQ 100 futures added 2%, while the broader NASDAQ Composite posted its worst day in over a year – falling 3.7%.
“The sharp drop in FB market cap today and the accompanying drag on the S&P 500 index is … a stark reminder of the high concentration of mega-cap Tech stocks in the S&P 500 — and the vulnerabilities that such concentration brings.”
Snap’s Better-than-expected Quarterly Earnings Likely Boosted US Stock Futures
Snap’s earnings for the fourth quarter beat out analysts’ estimates on earnings, revenue, and user growth. This development stands in stark contrast to the underwhelming Q4 earnings put out by Meta Platforms (NASDAQ: FB) just 24 hours before. The Facebook parent company failed to live up to the general consensus estimate for its latest quarter and dragged down several social media stocks with it. Snap was initially one of the early casualties as it dropped 23.6% alongside other major industry players, such as Pinterest and Twitter (NYSE: TWTR). However, this was before Snap and Pinterest posted their own quarterly results. Both have since rebounded in the hours since then, with Snap surging 62% before eventually settling in at 52%. Meanwhile, Pinterest initially surged 28% following its own quarterly release, and is currently hovering at 25%.
Snap’s earnings per share (EPS) was 22 cents adjusted versus the consensus estimate of 10 cents. In addition, the social media platform raked in a revenue of $1.3 billion, beating Wall Street’s $1.2 billion expectation. However, there was a decrease in Snap’s global daily active users (DAUs) from 319 million to 316.9 million. Lastly, the company’s average revenue per user (ARPU) translated to $4.06, higher than the consensus expectation of $3.79.
Rich Greenfield of Lightshed Partners touched on Snap’s earnings report and how it suggests that the social media tech sector players move independently. Following Meta’s poor showing, Greenfield said “everyone just gave up and sold the whole sector. That was clearly the wrong read.” He further added:
“What’s going to be really interesting is how investors start to look at these companies more individually versus … this whole sector.”
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