(Reuters) - Shares of Snap slumped 17% premarket on Friday, after a dour forecast from the Snapchat parent reinforced Wall Street's worries that the company would continue to cede business to bigger rivals amid intense competition in the advertising space.

The social media firm forecast third-quarter results below market estimates late on Thursday, blaming soft demand from advertisers in consumer discretionary sectors.

"We aren't confident of management's ability to consistently execute over several quarters," Roth MKM analyst Rohit Kulkarni said.

Snap's weak targets further highlight the chasm in the digital advertising market, which is dominated by large platforms such as Meta's Facebook and Instagram, Alphabet's Google and Bytedance's TikTok, making growth at the likes of Snap and Pinterest difficult.

Although Pinterest notably saw strong ad spend in a few industries including retail and technology, Snap has continued to struggle.

"The portion of the demand performance in Q2 that was particularly disappointing is some of the weakness that we've seen in particular consumer discretionary verticals, including technology, entertainment and retail," Snap CFO Derek Andersen said on a post-earnings call.

Snap, which gets nearly all its revenue from advertising, looks set to lose more than $3.5 billion in market value, if premarket losses hold.

The stock, however, is known to swing wildly after earnings reports, having surged close to 28% in the prior earnings cycle and slumped more than 34% in the season before that.

Meanwhile, Meta saw healthy global advertising demand helping it deliver a rosy third-quarter sales outlook, while Alphabet's advertising sales jumped 11% benefiting from events such as the Paris Olympics and elections worldwide.

"Snapchat has always been that social platform with potential - exciting, but also a burden. And it looks like we're still a bit of ways away from living up to that potential," Bernstein analyst Mark Shmulik said.