Facebook’s stock drop ‘a gift to investors’ – CNBC

Nomura analyst Anthony DiClemente told “Squawk Box” he’s not so bullish on Facebook.

“The company’s going through, basically, the way I see it, a product transition,” he said. “They’re going from static images in your Facebook feed to video, and that requires a tremendous pivot in terms of the infrastructure of the organization, the sales of the organization.”

The senior internet analyst said investors’ worries may have stemmed from a subtle, but significant change in the company’s language from the second quarter to the third.

“What the company has said [in the third quarter] is that ad load will be a ‘meaningfully’ lower contributor of ad revenue. Last quarter, I think that that word was more like ‘accordingly,'” he said.

That vocabulary change sparked more worries about 2017’s slowdown, DiClemente said.

“Is it tougher to get excited about Facebook when they’re going through a product transition and they’re not seeing upward earnings revisions because of some of these comments that I mentioned? Yeah,” DiClemente said.

However, he noted that Facebook’s earnings were still strong this quarter, and said the company is a “huge secular winner,” including in the battle over advertising against traditional media.

He said the worry lies in whether Facebook will be able to successfully accelerate its business and whether it will continue to beat estimates.

DiClemente said he would rather own Google parent Alphabet, Amazon and Netflix before Facebook in his ranking of the FANG stocks.

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