Stiff competition from TikTok and Apple Inc’s privacy changes will remain a cause for concern for Facebook-owner Meta Platforms Inc. in the near term, Wall Street analysts said.

At least 10 brokerages cut their price targets on Meta after the company reported its first-ever quarterly revenue drop on Wednesday, highlighting challenges faced by US companies from a stronger dollar as well as worries of an impending recession.

Apple upended the digital ad industry when it introduced new iPhone privacy controls last year that hurt the ability for companies such as Meta and Snap Inc. to target and measure ads on their apps, a Reuters report analysed.

That, coupled with TikTok’s growth is exacerbating recessionary fears, according to analysts.

Meanwhile, on Wednesday Meta Platforms Inc. issued a gloomy forecast after recording its first ever quarterly drop in revenue.

The company said it expects third-quarter revenue to fall to $26 billion and $28.5 billion, which would make it a second year-over-year drop in a row. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv.

Total revenue, which consists almost entirely of ad sales, fell 1 percent to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year. The figure slightly missed Wall Street’s projections of $28.9 billion, according to Refinitiv.

The company, which operates the world’s largest social media platform, reported mixed results for user growth.

Monthly active users on flagship social network Facebook came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1 percent year over year, while daily active users handily beat estimates at 1.97 billion.

Still, the Meta results also suggest that fortunes in online ads sales may be diverging between search and social media players, with the latter impacted more severely as ad buyers reel in spending.

The company is simultaneously carrying out several expensive overhauls as a result, revamping its core apps and boosting its ad targeting with AI, while also investing heavily in a longer-term bet on “metaverse” hardware and software.

In the second quarter, Meta reported $218 million in non-ad revenue, which includes payments fees and sales of devices like its Quest virtual reality headsets, down from $497 million last year.