On Thursday, it was revealed that Loop Capital analysts are worried about how a drop in ad revenue could affect Meta Platforms META +5.71 percent and Alphabet GOOGL +3.83 percent. Many people are concerned about the direction of online advertising.

When it comes to advertising companies like Google and Facebook, RBC Capital Markets analyst, Brad Erickson expressed similar worries, stating that a halt in the rise of online shopping might have a detrimental influence on their long-term earnings ( META ).

With inflationary pressures continuing to rise, Erickson expects that more small and medium-sized businesses might reduce their advertising budgets.

In the past few years, newcomer TikTok has lured away advertising money from the likes of Snapchat and Vine. TikTok’s ad platform and scalability improvements are a long-term danger for Meta, despite Erickson’s belief that companies would decrease TikTok spending before Google and Meta advertising spend.

In a study note, he stated, “bottom-line, we saw obvious indicators of fractures growing on total expenditure.”

For Meta, Erickson slashed his price estimate to $200 from $240, and for Alphabet, he slashed it to $2,700. Amazon.com AMZN +2.02% (AMZN) and Pinterest PINS +5.58% (PINS) were both reduced to $144 and $23, respectively, from their previous targets of $175 and $26, respectively, from their previous targets.

He also decreased his price estimate on Alphabet and Meta, Loop Capital’s Rob Sanderson, on Thursday. In light of the economic downturn, he expects digital businesses to provide cautious guidance in the upcoming batch of results.

On Friday, Alphabet’s shares rose by 3.7% to $2,328.46. While Amazon.com gained 2.1 percent to $114.80, Meta was up 5.3%. Pinterest’s share price increased by 5.3% to $20.95.

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