Tech’s strong ad sales are showing signs of cracking from Trump’s trade war
Mark Zuckerberg arrives before the inauguration of Donald Trump as the 47th president of the United States takes place inside the Capitol Rotunda of the U.S. Capitol building in Washington, D.C., Monday, Jan. 20, 2025.
Kenny Holston | Via Reuters
The digital advertising market was sunny enough for investors this past quarter, providing what could be a last hurrah before a looming economic storm from President Donald Trump‘s tariff onslaught.
Wall Street cheered the first-quarter results from tech giants like Meta and Alphabet, which both saw shares rise on strong revenue and earnings that beat analyst expectations.
The strong numbers from the online advertising titans in the face of economic worries showed that companies were still willing to promote their goods and services to consumers across the internet.
Amazon’s burgeoning online advertising unit also topped analyst estimates for the quarter. The online retail giant’s first-quarter ad sales jumped 19% year-over-year, representing a faster growth rate than Meta and Google’s advertising sales, which were 16% and 9%, respectively.
Smaller social media and online advertising firms like Reddit, Snap and Pinterest posted first-quarter sales that topped Wall Street projections. And even advertising technology companies like AppLovin and The Trade Desk posted strong quarterly earnings.
AppLovin shares surged nearly 15% on Wednesday after the provider of mobile ad technology surpassed analysts estimates and said it would sell its Tripledot Studios mobile gaming business.
Shares of The Trade Desk jumped 18% on Friday, just one day after the ad-tech firm reported first-quarter earnings that beat on the top and bottom lines.
The celebrations stopped, however, when it came time for executives to discuss the rest of the year.
Meta Chief Financial Officer Susan Li last week said that “Asia-based e-commerce exporters” are spending less on digital advertising due to the cessation of the de minimis trade loophole that benefited retail upstarts and heavy Facebook spenders like Temu and Shein.
“It’s very early, hard to know how things will play out over the quarter, and certainly, harder to know that for the rest of the year,” Li said during a call with analysts.
Executives at Alphabet and Pinterest shared similar sentiments about slower, Asia-specific ad sales and broader macroeconomic uncertainty heading into the rest of the year. Snap went so far as to pull its second-quarter guidance over the unpredictable economy potentially shrinking corporate ad budgets for the rest of the year.
Jeff Green, CEO of The Trade Desk, also noted the challenging economy on Thursday, saying that marketers face an “important time” as they work “amid increased macro volatility to start the year.”
“The good news is, Q1 was really strong, and Q4 of last year was pretty darn good,” said Sameer Samana, head of global equities and real assets for Wells Fargo Investment Institute.
But with companies from a variety of sectors lowering or even suspending their 2025 sales guidance, as in the case of auto giants like Ford Motor and toymaker Mattel, Samana believes the good times are likely coming to an end.
“What it’s telling me is that we better enjoy this rally, we better enjoy these good numbers,” Samana said. “This is going to be about as good as it gets for the coming year.”
In an ominous sign for social media and online advertising companies, retail and consumer packaged goods businesses like Procter & Gamble have warned of weakening sales amid the turbulent economy.
Jasmine Enberg, a vice president and principal analyst at eMarketer, said companies in these sectors generate “about half of all social ads in the U.S.,” and a decrease in their advertising spend “will have a ripple effect on the social ad market.”
Mark Zuckerberg, CEO of Meta Platforms Inc.; from left, Lauren Sanchez; Jeff Bezos, founder of Amazon.com Inc.; Sundar Pichai, CEO of Alphabet Inc.; and Elon Musk, CEO of Tesla Inc., during the 60th presidential inauguration in the rotunda of the U.S. Capitol in Washington, D.C., on Jan. 20, 2025.
Julia Demaree Nikhinson | Bloomberg | Getty Images
Enberg believes that a potential slowdown in advertising spend will hurt smaller tech platforms more than their larger rivals.
“I think what we’re likely to see is what we tend to see in times of economic uncertainty, which is that advertisers seek refuge in larger platforms that provide them with scale and consistent ROI,” Enberg said.
But even tech giants like Meta may feel some financial pain, explained Greg Silverman, the global director of brand economics at consulting firm Interbrand.
Although other retailers may decide to run Facebook ads now that China-linked retailers like Temu are stepping back, those promotional campaigns are unlikely to be as lucrative for those companies, said Silverman.
Temu was willing to spend big on Facebook ads because it previously benefited from the de minimis trade loophole, Silverman said, and it’s unlikely that any U.S. retailer will do the same, particularly with a rickety supply chain and high tariffs potentially raising the cost of their goods.
“The return on ad spend that Temu was getting on Facebook is going to be hard for anyone else to recreate,” Silverman said.
For Wells Fargo’s Samana, the current economic uncertainty can be traced to trade policy and tariffs and their ensuing effects throughout the markets.
“We started the year with very low levels on tariffs,” Samana said. “Tariffs at the end of this are going to be higher, and they’re going to be meaningfully higher, and that is just not good for markets. I think that’s the only point that matters.”
Technology
StubHub IPO is back on for September after ticketing company delayed plans on tariff concerns
StubHub, the ticketing marketplace that spun out of eBay in 2020, has resumed its plans to go public and is now aiming to hold its IPO next month, CNBC has learned.
The company originally paused its IPO plans in April as the stock market was reeling from President Donald Trump’s “liberation day” tariffs. The decision came after StubHub submitted its prospectus in March indicating it would list on the New York Stock Exchange under the ticker “STUB.”
StubHub now expects to kick off its IPO roadshow after Labor Day, Sept. 1, and make its debut later in the month, according to a source familiar with the matter who asked not to be named because the discussions are confidential.
The company didn’t immediately respond to a request for comment.
StubHub also filed an updated IPO prospectus on Monday. It reported revenue growth in the first quarter of 10% from a year earlier to $397.6 million. Operating income came in at $26.8 million for the period, after the company lost $883,000 in the year-ago period, but its net loss widened to $35.9 million from $29.7 million a year ago.
The IPO market has come to life in recent months after an extended dry spell due to high inflation and rising interest rates. A flurry of startups have made their public debuts, including rocket maker Firefly Aerospace, design software company Figma, crypto firm Circle and AI infrastructure provider CoreWeave. Bullish, the cryptocurrency exchange that counts Peter Thiel as an investor, also filed its IPO prospectus last month.
StubHub has been a longtime player in the ticketing industry since its launch in 2000. It was purchased by eBay for $310 million in 2007, but was reacquired by its co-founder Eric Baker in 2020 for $4 billion through his new company Viagogo.
The company had sought a $16.5 billion valuation before it began the IPO process, CNBC previously reported. StubHub didn’t provide an expected pricing range for its shares in the filing.
As it prepares to go public, StubHub is contending with hefty competition in the online ticketing market. In addition to Ticketmaster, which is owned by Live Nation, StubHub is up against secondary market companies, including Vivid Seats, SeatGeek and TicketNetwork
For the first quarter, StubHub reported gross merchandise sales of $2.08 billion, up 15% from a year prior. That was a slowdown from 47% expansion the previous quarter. StubHub said GMS, or the total value paid by buyers for tickets and fulfillment, builds in each quarter and that initial sales for major concert tours typically occur near the end of the year.
U.S. President Donald Trump (L) listens as Nvidia CEO Jensen Huang speaks in the Cross Hall of the White House during an event on “Investing in America” on April 30, 2025 in Washington, DC.
Andrew Harnik | Getty Images
President Donald Trump on Monday said that he initially asked Nvidia for a 20% cut of the chipmaker’s sales to China, but the number came down to 15% after CEO Jensen Huang negotiated with him.
The comments came after news broke over the weekend that Nvidia agreed to pay the federal government a 15% cut in return for receiving export control licenses that will allow it to once again sell the H20 chip to China and Chinese companies. Nvidia’s Huang visited Trump in the White House on Friday.
“I said, ‘listen, I want 20% if I’m going to approve this for you, for the country,'” Trump said in a press conference in Washington.
Trump said that Nvidia’s H20 is an “old chip that China already has” and is “obsolete.” He compared the H20 chip to Nvidia’s current fastest artificial intelligence chip, which is called Blackwell, and said that he wouldn’t allow those to be sold to China without significant downgrades, such as a 30% to 50% reduction in performance.
“The Blackwell is super-duper advanced. I wouldn’t make a deal with that,” Trump said, adding that it was possible to make a deal for a “somewhat enhanced in a negative way” version of Blackwell.
“That’s the latest and the greatest in the world. Nobody has it. They won’t have it for five years,” Trump said.
One reason for the U.S. export controls is fear that providing advanced chips to China could allow the foreign power to leapfrog the U.S. in AI capabilities. Many have said that could pose a threat to the national security of the U.S.
Trump said that China already has chips with some similar capabilities to the H20.
Huang has said that it is better for U.S. national security if Chinese AI developers use U.S. technology, and that denying them access to Nvidia chips would actually encourage the Chinese chip industry to develop and catch up.
“He’s selling a essentially old chip,” Trump said. “Huawei has a similar chip.”
The H20 is a Chinese-specific chip that has had its performance slowed down. It is related to Nvidia’s H100 and H200 chips that are used in the U.S. The H20 was introduced after the Biden administration implemented export controls on AI chips in 2023.
In April, the Trump administration said it would require a license to export the H20 chip, and in May, Huang said that “effectively closed” the market off to Nvidia. Huang said that Nvidia was expecting to sell about $8 billion in H20 chips in the July quarter before sales were stopped.
“While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide,” an Nvidia spokesperson told CNBC on Monday.
Trump on Monday also said that Huang plans to visit him again to negotiate export licenses for the Blackwell chips.
“I think he’s coming to see me again about that,” Trump said.
A White House official confirmed to CNBC that AMD, the second-place AI chip maker, will also pay 15% to receive an export license for its China-focused AI chip, the Instinct MI308.
WATCH: Nvidia, AMD to pay U.S. 15% of AI chip sales in China to secure export licenses
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