US president Donald Trump's trade war could put as much as $7 billion in advertising dollars out of China at risk for Meta, according to calculations by an industry analyst.
Advertisers from China such as shopping website Temu use Meta platforms Facebook and Instagram to sell to consumers in the US but tariffs of 145% put business in America in the too hard basket.
Meta’s ad revenues from Chinese-based advertisers have increased by $11 billion and sourced nearly 25% of company growth, according to Michael Nathanson of MoffettNathanson in the US.
Nathanson forecasts that perhaps $7 billion of that incremental spending could be at risk.
And a prolonged economic downturn coupled with a trade war could wipe $23 billion in 2025 advertising revenues off Meta’s books and crush 2025 earnings by 25%.
Nathanson continues to rate Meta a buy but is decreasing his price target by $US185 to $525.
Meta posted a 21% lift in revenue to $US48.385 billion in the December quarter, beating analyst expectations. Full year revenue was up 22% to $US164.5 billion.
The company is due to release March quarter results this month.
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