Us stocks entered the earnings season as Facebook Inc's parent company Meta released its latest quarterly results, showing the slowest sales growth in a decade and tepid revenue guidance.

Mark Mark Zuckerberg, chief executive of Meta, said in a live webcast with analysts that "revenue headwinds" could slow investment.

Still, Meta rose nearly 20 per cent in after-hours trading on Wednesday after the company, formerly known as Facebook Inc, reported first-quarter profit of $7.47 billion, or $2.72 a share, the lowest level since the third quarter of 2020. Sales last year were $27.9 billion, up 7 per cent from $26.2 billion a year ago. Analysts said earnings beat the average estimate of $2.56 a share, but revenue was below consensus expectations of $28.3 billion.

Meta released second-quarter revenue estimates of $2.8 billion to $30 billion, while analysts expected $30.7 billion. Facebook Inc executives cited inflation, supply chain problems, geographical factors, the headwind of the European economy, increased competition for rival services and changes in Apple Inc. Apple Inc has improved its mobile operating system to make it more difficult for applications to track consumers through advertising.

In a white paper released by Apple Inc on Tuesday, Kinshuk Jerath, a marketing professor at Columbia business School, concluded that it was just speculation that billions of dollars in advertising revenue from companies such as Meta would be diverted by Apple Inc's latest move.

"this outlook reflects continuing trends affecting revenue growth in the first quarter, including geographical weakness in the second half of the first quarter," David Wehner, Meta's chief financial officer, said in an earnings statement. Based on the current exchange rate, our guidance is that foreign exchange growth in the second quarter will face resistance of about 3% year-on-year. "

In a live webcast speech, Zuckerberg acknowledged the influence of his peers and Apple Inc, but said Meta was confident to deal with it with Reels short video and artificial intelligence respectively. The company's foray into meta-universe will also increase revenue, especially advertising, he added.

In addition, Facebook Inc's daily active users (dau) rose 4 per cent to 1.96 billion, exceeding analysts' expectations of 1.95 billion. Dau is the key indicator to measure the global growth of Meta. The rise has largely allayed concerns among investors, who have publicly worried about the decline in user participation on Facebook Inc's platform.

The growth of dau (daily active users) bodes well for Facebook Inc, especially in the fourth quarter of 2021, when the company experienced its first dau decline. But it is also clear that Facebook Inc is still trying to attract new users, and it is becoming increasingly difficult for Instagram to fill the gap, "said Evelyn Mitchell, an analyst at Insider Intelligence.

"the monthly active users and dau growth in the first quarter mainly came from the rest of the world, not from the United States and Canada, which are more profitable. "

Meta shares are among the worst technology stocks this year, down 48% so far, while the s & p 500 index fell 12% in 2022.

One technology stock analyst said that against the backdrop of slowing economic growth and rising interest rates, technology stocks are under tremendous selling pressure and the end of pessimism is just around the corner.

"our conversation with institutional investors is obviously very negative [for large technology stocks]," said Brent Bracelin, an analyst at Piper Sandler technology stocks. "people are still very worried about the increasing global risks. Having said that, my personal view is that bear market sentiment seems to be nearing its peak. "

Bracelin said the market's sentiment towards large technology stocks is very negative and may be close to reasonable buying prices. "everyone is generally bearish," Bracelin said.

"generally speaking, when all investors are on the side of the boat, it is usually when the boat capsized. Given these increasing global risks, the data are likely to change significantly over the next two quarters. But from a popularity point of view, it is hard to see things becoming more pessimistic from now on. "