The secret weapon of Meta Platforms ( NASDAQ:META ) is most likely not the metaverse, but rather Facebook and Instagram Reels . While the market hasn’t been too happy with Meta stock since the beginning of this year, there’s a sign that a recovery is on the way, as the last earnings report revealed that Meta’s Reels product is gaining traction and could help the company weather the current storm.
Even though the digital ad market is in a cyclical decline and there’s a good chance Meta’s business won’t grow much this year or its metaverse initiatives will remain unprofitable, Reels allows the company to compete on an equal footing with TikTok and potentially gain market share from it. Reels has the potential to help Meta enhance its position in the video section of the digital ad market in the next years. As a result, it could be a perfect moment to hold a position in Meta stock, as if Reels continues to perform well, the company’s price could appreciate in the next quarters.
Meta Q3 Is Quickly Approaching
Meta had an unquestionably awful start to the year. Following a string of poor results in recent quarters, Meta stock has fallen 60% year to date and is currently trading near its 52-week lows. However, the company will announce its third-quarter results later in October, and there is a chance that some of the company’s key metrics will improve. After all, even if Meta generated just $28.82 billion in revenue in Q2 , down 0.9% year on year and $130 million less than expected, its active user base has grown, with DAP and MAP ...
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