Why Meta is a great buy after Q1 earnings slump
In the wake of Meta Platforms Inc. (NASDAQ: META) recent earnings report, the company finds itself at a pivotal juncture, with both triumphs and challenges shaping its narrative.
During the conference call, Mark Zuckerberg, Meta’s founder and CEO, expressed satisfaction with the company’s performance, citing notable achievements such as surpassing revenue expectations and robust growth across its suite of apps. However, investors responded with apprehension, driving the stock down by 10.56% in the aftermath of the earnings release.
Zuckerberg’s optimism during the earnings call was palpable as he emphasized Meta’s strides in advancing artificial intelligence (AI) technologies, particularly with the introduction of Meta AI featuring Llama 3. He underscored the significance of this progression in Meta’s journey toward establishing itself as a leader in AI innovation.
Despite his positive outlook, concerns lingered among investors regarding Meta’s elevated spending projections, especially pertaining to AI development and infrastructure investments. Zuckerberg’s reassurances about the long-term potential of these investments failed to assuage investor apprehension.
The discrepancy between Meta’s planned optimistic trajectory and investor skepticism underscores the complexity of its current position. While the company is making significant headway in key strategic areas such as AI and the metaverse, the financial implications of these endeavors are generating uncertainty among stakeholders.
As Meta navigates through this period of transition and transformation, let’s see what the charts and technical indicators have to say about the stock’s future trajectory.
Why $400 is Key for Meta Investors
Meta’s recent performance may have caused some concern, but there’s good news for long-term investors: the stock is holding steady above its long-term trendline from November 2022. This stability is reassuring for those planning to hold onto their shares for the long haul.
What’s particularly noteworthy is that despite a rough start yesterday, Meta didn’t come close to touching its near-term support level at $400. Since the company’s Q4 2023 results were announced on February 1, the $400 mark, once a resistance point, has transformed into a strong support level.
For bullish investors, this presents a promising opportunity to buy into the stock at current levels, setting a stop loss at $398. As long as Meta stays above $400, there’s a good chance it will perform well in the medium term and potentially climb back above $500.
However, traders considering shorting the stock should proceed with caution. Despite its weak start yesterday, Meta quickly rebounded from $415 to over $440. For shorts to work, the stock would either need to remain within a tight range until medium-term indicators turn negative, or it would need to initiate a rapid decline and fall below yesterday’s low at $414.75.
The post Why Meta is a great buy after Q1 earnings slump appeared first on Invezz
