With the flurry of quarterly earnings calls that took place this week, there’s been a shuffling of the deck when it comes to the biggest American companies. Facebook’s parent company Meta Platforms has had a rough ride, announcing a decline in its active user base for the first time in history (among other “headwinds”), causing its stock price to plummet. This has allowed Nvidia, which has been pulling in record revenue quarter-after-quarter, to displace the Zuckernought, at least briefly. As Tuesday night, Nvidia is the 10th most-valuable US company, having touched 7th place earlier in the week.
According to an analysis by MarketWatch, as of Monday of this week Nvidia posted a market value of $618.2 billion. In the wake of Meta’s earnings call and subsequent stock dive, its market cap fell to $612.2 billion. This marks a spectacular rise for Nvidia, which was the 15th largest US company a year ago, and the 50th largest two years ago, according to Dow Jones Market Data. As we reported in November of 2021, Nvidia has been on a tear since the pandemic began, with demand surging for all of its products, allowing the company to increase revenue year-over-year by 40 to 50 percent in some cases.
Meanwhile, Meta has been hit with a flurry of challenges, including competition from Tik Tok, changes to Apple’s privacy features on iOS, widespread uncertainty over its plans for the metaverse, as well as a declining user base. When Meta discussed all these issues in its quarterly earnings call with investors, the drop in its stock price reduced its market value by $232 billion, which was the biggest one-day decline in value for an American company in history. For some context, AMD’s entire market cap is $148 billion, so Meta’s loss was quite stunning.
Meta’s stock price after its Q4 earnings call.
The precipitous fall of Facebook slash Meta has been something we’ve covered a lot lately, as the company continues to suffer slings and arrows from all directions. In its earnings call this week it listed just some of them, which included a prediction that Apple’s decision to allow iOS users to opt-out of tracking would cost the company $10 billion dollars alone in 2022. It also announced it had dumped the same amount of money — $10 billion — into the money pit known as Reality Labs, which is the part of the company working on its plans for the metaverse. This division, which includes its virtual reality hardware made by the entity formerly known as Oculus, announced this week it was changing that branding to Meta as well. The updated Meta Quest branding inspired a bit of online mockery.
The juxtaposition is a tale of two companies on different trajectories. Nvidia is selling every single product it makes, and would sell even more if it could. Meanwhile Facebook/Meta seems hell bent on pushing its services into people’s lives even if they want nothing to do with it. As an example, despite its anger with Apple over letting people choose to opt-out of being tracked by its app, news reports alleged that Facebook (and Snapchat) had found a loophole in Apple’s policies on tracking, and was continuing to track people who opted-out. It’s antics like this, along with a lot of lawsuits and bad PR, that caused Facebook/Meta to be named the Worst Company of the Year in Yahoo Finance’s 2021 poll. Company valuation fluctuates based on stock price, so the ranking may have shifted again by the time markets open and you read this.
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