Meta Stock

The CNBC Investing Club gives investors a behind-the-scenes look at how Jim Cramer manages an investment portfolio so you can manage your own money and build ...

But it's important to recognize the differences in scale and perceived value Alphabet and Meta have compared to Snap and other smaller social media firms, such as Pinterest (PINS). Another key difference to keep in mind is the financial health of Alphabet and Meta, and the way investors value those companies. While JPMorgan said it anticipates expectations for Alphabet and Meta to will fall further, the analysts highlight the key differences between Alphabet and Meta. When companies need to tighten the belt, marketing budgets are one of the first places they look. That came after Alphabet repurchased roughly $13 billion worth of shares in the first quarter alone — almost approaching the entire value of Snap on Friday around $16.4 billion. Google's ad revenue rose 22.3% year over year in the first quarter to $54.66 billion. In the first quarter, Meta's ad revenue rose 6.1% year over year to roughly $27 billion. Snap's year-over-year revenue growth rate went from 38% in the first quarter to 13% in the second. We know GDP growth in the U.S. is slowing considerably — it was negative in the first quarter and could very well be in the second quarter , too. Analysts from JPMorgan summarized the situation well in a note to clients Friday, as they downgraded Snap to underweight from overweight. Its overall revenue rose 7%, the first time since the company went public a decade ago that its growth rate was in the single digits. At the most basic level, that is not great news for Alphabet and Meta. Analysts who cover the companies have been revising their revenue estimates lower for the second-quarter — and the third and fourth quarters for that matter. Of course, it's hard to quantify its specific impact, so we think it's prudent to primarily zoom in on Snap. What it means for Alphabet and Meta Simply put, Meta and Alphabet are just much bigger, more established players in the digital ad market than Snap is. Disappointing results from the parent company of Snapchat (SNAP) are weighing on other digital ad stocks Friday, but Club members should be mindful of important differences between companies in the industry.