Shares of both Pinterest Inc and Snap Inc tumbled about 18% on Friday after the two social media companies’ quarterly reports spooked investors worried about weak digital ad spending.
Their disappointing reports late on Thursday stood in contrast to strong results earlier this week from digital advertising heavyweights Alphabet Inc and Meta Platforms Inc, and show that advertisers are sticking with the biggest players in an uncertain economy.
Pinterest forecast second-quarter revenue growth below Wall Street estimates late on Thursday as the image-sharing platform grapples with a pullback in advertising spending in a market it warned remained uncertain.
Also reporting late on Thursday, Snapchat owner Snap missed analysts’ expectations for revenue, blaming changes to its advertising platform that it said hurt demand for ads. It warned results in the next quarter could fall below Wall Street’s targets.
Snap said it was taking steps to improve the relevance of ads shown to users, and those changes in some cases meant advertisers saw fewer “actions,” such as users’ tapping on ads.
