Facebook (FB) stock could jump after Wednesday’s earnings report despite the impact of COVID-19 on the company’s advertising model.
According to a report by InvestorPlace, Facebook has been the worst-performing FAANG stock this year. Shares in FB are down 7.5% year-to-date and 0.94% over the past year. However, Facebook has experienced a rally over the past week in anticipation of Wednesday’s earnings report release.
Source: Google
The report claims the short-term rally is in response to Snap (SNAP) reporting “better-than-expecting earnings,” which saw share prices jump more than 40% on April 22. Investors are anticipating a similar windfall for Facebook, despite the economic impact of COVID-19, as the social media giant’s traffic has been rising so far this year.
A New York Times report earlier in the month highlighted the impact of the pandemic on Facebook’s advertising budget, with annual revenues projected to decline for the first time in the social media company’s history.
Facebook itself released a statement commenting on the impact of COVID-19 and digital ad spending.
The company said:
We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19.
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