This seems more like a symptom of the market being generally skittish, with a small side of "expected" earnings actually being a low-biased estimate, so it's more like a 10% miss.
The miss is also against future guidance. This could be answering a question of “Is Facebook too distracted to grow their core business?”
Anyone who thinks they’re more rational than the market can take the other side of these large moves. (Many quant hedge funds do)
FBs P/E ratio was well into the value stock territory of ~22 before this dip. They were trading at the lowest multiple of any other big tech company by far, now they're even more insanely undervalued from a fundamentals perspective. I realize that doesn't matter in the age of the meme stock, but personally I'm still pretty bullish in the long term and that's assuming the XR stuff is just a giant money furnace and returns nothing.
FB at it's worst is growing much faster than average, it's balance sheet is healthier than almost every other company beside MAAG, and yet it is valued below average.
Make of that what you will.
Also, re: the parent comment, a P/E of 22 would traditionally never be called "value stock territory"...whether or not that valuation is too pessimistic about Facebook's growth prospects.
Historically, around 15 is the mean, not 25
Stimulus checks combined with broad accessibility of trading platforms (Robinhood, etc.) led to fund inflows growing 71% https://www.reuters.com/markets/europe/global-markets-etf-gr...
And that's just ETF inflows aside from mutual funds and options markets.
The top recipients, according to the article linked above, were VOO, VTI and SPY. All follow an index that's market-cap-weighed, benefiting top 10 holdings more than the rest of the market.
The explanation I've seen floated is retail investors treating VOO and VTI as their savings account (for the lack of any decent yield opportunities). That money is eventually going to be withdrawn and spent, punishing those top 10 holdings excessively compared to the rest of the market.
Inflows into market cap-weighted index funds should spread the gains evenly.
Zuck is also kind of saying that their slice of the pie is getting smaller due to competition like Tiktok. That just kills sentiment.
Hard to say if the metaverse will play out favorably or if it is going to just be hype. If I were to tell my past self 10 years ago that this is the world we live in now with EVs and cryptocurrencies etc being mainstream I would certainly not believe it nor would I have bet the farm on Elon or Bitcoin