Market Overview

Gene Munster: After Facebook Fallout, Investors Could Flock To Privacy Safe Havens

Share:
Gene Munster: After Facebook Fallout, Investors Could Flock To Privacy Safe Havens
Related FB
Moderate Inflation, Positive Retail Earnings Offer Lift In Back-And-Forth Market
Loup Ventures: Facebook, Twitter Should Let Users Filter Political Content From News Feeds
New Ad Kid Amazon Beating Up Facebook And Google (Seeking Alpha)
Related AAPL
Moderate Inflation, Positive Retail Earnings Offer Lift In Back-And-Forth Market
Benzinga's Top Upgrades, Downgrades For November 14, 2018
Strategies For An Unstable Market (TalkMarkets)

Amid the fallout over Facebook, Inc. (NASDAQ: FB)’s privacy concerns, investors may pay special attention to “privacy safe havens” Apple Inc. (NASDAQ: AAPL) and Amazon.com, Inc. (NASDAQ: AMZN), said Loup Venture's Gene Munster. 

Facebook’s New Risk Factors

After news broke of unauthorized user data being collected through Facebook by the firm Cambridge Analytica, the social media platform became exposed to the risk of user attrition due to lost trust, Munster said in a note. 

If Facebook does not meet its daily active user  growth estimates, shares could be negatively impacted this year, he said.

“While it’s still early to tell how serious this bout of outrage against Facebook will ultimately be, Twitter and Snap may have an opportunity to benefit if users do leave Facebook.”

Potential regulatory measures as a result of this fallout could also pose a risk — not just to Facebook, but to all companies that rely heavily on monetizing data, Munster said. 

Apple’s Privacy Ethos

Apple has placed a strong emphasis on customer privacy, claiming it to be a “fundamental human right." 

Apple does not gather personal information to sell to advertisers, and whenever third-party vendors are used to store information, it is encrypted, Munster said. 

Amazon: Service First

Amazon is another FAANG stock that could be exempt from investor concerns over privacy. The company is strongly driven by its core services, and advertising revenue makes up less than 3 percent of the company’s revenue, Munster said. 

“Advertising has never been a focus of the company, and it’s inconceivable they would abandon their current core businesses to pivot to an ad-first model that leaves them exposed to the risks we’ve highlighted in this note." 

Price Action

Facebook shares were down 2.48 percent at the time of publication Monday morning. Amazon was up 1.9 percent and Apple was up 2.12 percent. 

Related Links:

Analyst Wonders: 'Will Facebook Do The Right Thing?'

Tech Expert Breaks Down The FAANG's 2018 Outlook

Latest Ratings for FB

DateFirmActionFromTo
Nov 2018ArgusMaintainsBuyBuy
Oct 2018Morgan StanleyMaintainsOverweightOverweight
Oct 2018Raymond JamesMaintainsOutperformOutperform

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Cambridge Analytica Gene Munster Loup Ventures social mediaAnalyst Color Top Stories Analyst Ratings Tech Best of Benzinga

 

Related Articles (AAPL + AMZN)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AMTDMorgan StanleyUpgrades65.0
APOMorgan StanleyDowngrades34.0
ARMKBairdUpgrades44.0
CGMorgan StanleyDowngrades23.0
EIXEdward JonesDowngrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

This Day In Market History: OPEC Raises Crude Oil Prices By 9%

Mid-Morning Market Update: Markets Open Higher; JD Sports to Acquire Finish Line For $13.50/Share