(Reuters) -Snap shares tumbled more than 15% on Wednesday after the social media company held back its forecast, stoking fears that advertisers were cutting their spending due to tariff-led economic uncertainty.
Health of the advertising market will be yet again in focus when Meta Platforms, which owns ad-reliant platforms like Facebook, reports results after the market closes.
The Snapchat parent said it was seeing a slowdown in ad spending in the second quarter and raised doubts about advertising budgets due to tariff impact.
Daily average U.S. ad spend by Chinese e-commerce websites Temu and Shein on Facebook, Instagram, Snap and Pinterest has fallen more than 50% in the second quarter till date, according to Sensor Tower data.
Snap CFO Derek Andersen said spending for some advertisers were “impacted by the changes to the de minimis exemption” that allowed duty-free U.S. entry for merchandise from China and Hong Kong priced below $800.
The Trump administration closed the trade loophole through an executive order, which will take effect on May 2.
Snap is set to shed more than $2 billion from its market valuation of $15.42 billion, if losses hold. At least 17 brokerages cut their price target for Snap, bringing the median to $10.
But Jefferies analysts said Snap is “being cautious more than signaling a broader ad market slowdown”.
Last week, Google reported revenue of $66.89 billion from its mainstay ad business, which makes up nearly three-quarters of its overall revenue.
(Reporting by Harshita Mary Varghese in Bengaluru)
