Facebook is one of the biggest online advertisers and the company’s ad business has seen incredible momentum lately resulting in high quarterly revenue.
Facebook stock price have been on the rise. The stocks of the American Internet giant have added about 1.7% since last month, outperforming the S&P 500. The surge in the company’s stock price is attributed to its quarterly results along with an increased revenue estimate. Facebook shares were being traded at USD 372.63 at the time of writing.
Why is Facebook share price going up?
Facebook is one of the biggest online advertisers with strong revenue. The company’s advertising business has seen incredible momentum lately. Facebook’s top-and bottom-line quarterly results, owing to the increased revenue from its ads, continue to beat expert analysts’ calculations and thus, continues the surge in Facebook stock price time after time.
According to a report by Zacks, an investment research company, Facebook’s second-quarter 2021 earnings of $3.61 per share once again beat the analysts’ estimate by 19.1% and continued to surged 100.6% year over year. Advertising remained the biggest factor as the company’s second-quarter ad revenue increased 56% year over year to reach $28.58 billion. Moreover, other revenues of the company surged 35.8% year over year to $497 million. Apart from the United States & Canada, the revenue has been on the surge in the Asia-Pacific and Europe.
According to international reports, Facebook is expecting a downward trend in its revenue. The company is expecting the growth rate for the third and fourth quarters of 2021 to decelerate owing to certain changes. Facebook expects a drop in user interest due to changes made in iOS 14.5 update that limit its ability to track the user-activity trends. The company which strives on the personalised ad platform will have an issue to face if such changes come by in the future from other operating systems as well.
Facebook anticipates total capital expenditures to rise, owing to its higher spending on data centres, servers, network infrastructure and office facilities. The company, which is currently on top of the market expects a slow decline. However, many market experts still remain confident in the company’s stocks as it has always crossed all expectations put forth by the investors.
Meanwhile, in other Facebook news, the company received yet another blow on Thursday when Russia fined the company for not complying with Russian legislation. Russia’s internet watchdog said that the company along with Twitter and WhatsApp failed to abide by the rules for storing data of Russian users on domestic servers. Facebook was handed a fine of 15 million rubles while WhatsApp was fined four million rubles.