Skip to content
Subscriber Only

Alphabet, Facebook Drop as Citi Warns of Ad Growth Slowdown

  • Digital ad growth seen decelerating, a risk to stock multiples
  • Facebook and Alphabet drop but remain 2021 outperformers
Updated on

Alphabet Inc. and Facebook Inc. tumbled on Monday, leading a broad move lower in internet stocks after Citigroup Inc. warned about the outlook for digital advertising, a key source of revenue for the sector.

The firm downgraded both names to neutral from buy, writing that “caution is in order” for companies that derive revenue from digital advertising. While ad budgets are expected to continue shifting online, growth is likely to decelerate, and “historically, that usually isn’t bullish for multiples,” analyst Jason Bazinet wrote.