Facebook's post-earnings bloodbath amounted to the biggest one-day loss of market value by a single company in U.S. stock market history. But some on Wall Street say shares of the social media network will easily recover. The stock tanked nearly 19 percent on Thursday, going negative for the year and extending its massive after-hours move after a quarterly earnings report that missed analysts' estimates on revenue and daily active users. "The knee-jerk reaction is to say that you're going to see money exit some of these mega-cap names and go into some other areas of technology, which I frankly just don't see that to be the case," David Seaburg, head of sales and trading at Cowen, said Thursday on CNBC's "Trading Nation." "Traditionally, you'd made the argument that hardware would be a place you'd see money go. That would be Apple, and we'd see software as well as a recipient of some of the dollars that may come out of Facebook today. You could point to a slew of names within that area that would be beneficiaries — but ultimately, I think Facebook is fine here," Seaburg said. To be sure, analysts' reaction to Facebook's earnings report was broadly negative. Analysts at UBS, Nomura Instinet and Raymond James downgraded the stock, while others were more optimistic and maintained overweight or buy ratings. Bank of America said in a note it expected "some support for the stock on the view that there is upside potential vs. a low bar, and that revenues could reaccelerate after a usage shift (stories, video) adjustment period." Jefferies said that despite Facebook's guided deceleration, it views weakness as a buying opportunity. It's a "foundation built through scaled quality connections and best in class tools will drive continued advertiser [return on investment]," the firm said in a note. Other market watchers advise that instead of putting money to work in a social media play like Facebook, Snap or Twitter, Google parent Alphabet is the smarter technology bet now. "They just delivered awesome second-quarter earnings because of mobile growth and strong advertising revenues," Mark Tepper, president and CEO of Strategic Wealth Partners, said Thursday on CNBC's "Trading Nation." Alphabet's advertising strategy and Google's cloud features are major reason to own the stock over a name like Facebook, Tepper added. Facebook shares closed down nearly 19 percent on Thursday, closing at 176.26 per share and shedding $119.4 billion in market value. In Friday's premarket, they were up nearly 1 percent. Twitter shares nosedived 14 percent before Friday's opening bell after the social media company reported disappointing data on monthly active users.<doc-sep>The major stock indexes traded in different directions on Thursday as investors grappled with a disastrous quarterly report from Facebook. The Nasdaq Composite dropped 1 percent to finish at 7,852.18, led by a steep decline in Facebook shares. The index posted its worst one-day loss since June 27, when it lost 1.5 percent; Facebook suffered its worst day in its history as a public company with shares closing down 18.96 percent. The broader stock market held its ground, however, as the S&P 500 finished down 0.3 percent at 2,837.44 while the Dow Jones Industrial Average rose 112.97 points to 25,527.07 amid gains in 3M, Boeing and Travelers Companies. The historic drop in Facebook shares came a day after its quarterly revenue missed expectations. Global daily active users, a key metric for the social media giant, also disappointed investors. Additionally, Facebook said it expects its revenue growth rate to slow down from last year. Facebook's earnings per share, however, topped Wall Street estimates. "When you have companies that are valued to perfection, it leaves very little room for error," said Ernie Cecilia, CIO at Bryn Mawr Trust. "These companies have performed very well. The problem is that companies that are missing expectations or guiding to the light side, are getting punished much more than in year's past." Facebook's negative results offset strong earnings from NBCUniversal-parent Comcast, Qualcomm and Advanced Micro Devices. Comcast shares rose 3.9 percent — leading Disney shares higher by 2.1 percent — while Qualcomm and Advanced Micro Devices jumped 7 percent and 14.3 percent, respectively, on better-than-expected earnings. The social media company's decline also comes ahead of the release of Amazon's latest quarterly figures. Google-parent Alphabet rose after releasing its earnings earlier this week, but Netflix shares tanked last week following the release of its quarterly numbers.<doc-sep>
Until Thursday, Facebook was enjoying enormous gains. The stock was up more than 23 percent for the year, before it reported earnings after Wednesday’s close. By Thursday afternoon, all of its gains for the year had vanished. It was the details of Facebook’s report that seemed to spook investors. The company’s quarterly revenue fell slightly short of meeting the expectations of Wall Street analysts. And executives warned that the company would invest heavily in privacy and security, and that revenue growth would most likely slow in coming quarters. [Read more about the accumulation of issues Facebook said is starting to hurt its multibillion-dollar business.] Still, Facebook’s sharp drop seems to have had a limited effect on the broader market, which has shown signs of gaining traction in recent weeks as companies largely reported strong second-quarter earnings. On Thursday, the S.&P. 500 was down only slightly, despite Facebook’s tumble. Other large tech firms didn’t take any cues from Facebook: Alphabet shares rose 0.8 percent and Apple slipped only 0.3 percent. Amazon fell 3 percent, but recovered those losses after hours on Thursday after issuing a strong quarterly earnings report. The S. & P. 500 fell just 0.3 percent Thursday, to 2,837.44, while the Dow Jones industrial average rose 0.4 percent to 25,527.07. The tech-heavy Nasdaq Composite index was the hardest hit by Facebook’s tumble, dropping 1 percent to 7,852.18. The S. & P. 500 is up more than 6 percent this year despite trade tensions surrounding the United States and its largest trading partners and the Federal Reserve’s increases in interest rates. The index ended Thursday only about 1 percent below its high hit on Jan. 26.