1. Meta's ad revenue from China rose significantly amidst rising trade war risks. 2. Trump's tariffs could impact ad spending, risking $7 billion in revenue. 3. Analysts cut Meta's price target from $710 to $525, maintaining a 'buy' rating. 4. Prolonged economic downturn could decrease Meta's 2025 earnings by 25%.
Historical instances show that trade wars negatively affect advertising revenue, especially from impacted regions. Meta's heavy reliance on Chinese advertising could lead to sharp declines.
The dependence on Chinese revenues, and impending tariffs present real risks to META’s profitability and stock performance.
Potential long-lasting impacts from tariffs and economic downturns may reduce future earnings significantly, similar to past market responses during economic slowdowns.