Technology

Deutsche Bank released a report that although preliminary evidence shows that the Meta Platforms (NASDAQ:META) short video platform Reels business is performing well, competition is everywhere and cyclical concerns remain. The bank believes that Meta’s challenges remain largely temporary, and that investments in privacy-preserving measurement and location solutions, growth in signals on the platform, and increased Monetization of Reels should mitigate current headwinds over time. The company is shifting to prioritizing efficiency this year and beyond, lowering the midpoint of its FY23 operating expense and capital expenditure guidance by $5 billion and $4 billion, respectively, which is expected to deliver significant upside in earnings and free cash flow. In terms of revenue, Reels appears to have reached sufficient size to focus on monetization efficiency while adding $40 billion in repurchase authorizations, which is another positive news for capital allocation. The bank kept its revenue forecast relatively unchanged, but raised its