Meta Platform stock is facing a mega market reset

Anyone waiting for a pickup Meta platforms NASDAQ: META shares should cheer first-quarter results. The news highlights the company’s strengths, but resulted in a 15% correction in the stock price. Analysts are adjusting their targets, but continue to see substantial upside, taking the market to new heights. Weak guidance or not, Meta is expecting a solid year and will likely exceed his goals.

Marketbeat.com is tracking more than a dozen analyst reviews that suggest a 20% to 50% upside from the post-release price. Most revisions are lower, but range from slightly below consensus to well above it. Several revisions are higher and also align with a consensus or higher outlook for stock prices. The bottom line is that the consensus target of 135% growth in twelve months is in line with the all-time high stock price and continues to rise. Price action in Meta may be volatile in the coming weeks or months, but the market bottom is near and a rebound is on the way.

Meta Platforms Increases Leverage in Q1

Meta Platforms had a solid first quarter, producing revenue of $36.46 billion. The 27.3% year-over-year growth beat Marketbeat.com analysts’ consensus forecasts by 660 basis points on growth in users, ad serving and revenue per ad. DAP increased 7% companywide, with ads delivered up 20% and revenue per ad up 6%.

Margin is another area of ​​strength. The efficiency and leverage advantage gained from revenue growth reduced operating margin by 1,300 basis points. Because of this, bottom line results grew 115%, leaving GAAP earnings at $4.71 and the company in solid financial condition.

The guidance, especially the increase in CAPEX, is why the market for Meta stock resets. The company released second-quarter guidance in line with analysts’ consensus forecasts, but with the midpoint below it. Added to this is a 12% increase in planned spending as the trend towards AI infrastructure increases. The problem for the market is that AI costs more than expected and does not provide the strength secretly hoped for. However, forecasts are still strong, with revenue expected to rise 20% year over year in the second quarter and a positive long-term outlook.

Meta platforms increase CAPEX, analysts defend the movement

The chatter on Wall Street is bullish. The bottom line is that Meta stock’s momentum is probably over, but the next phase of growth is upon us. AI has already brought positive results and should continue to gain momentum as the technology advances. AI is also believed to help Meta by increasing its differentiation from other social media companies and ensuring its long-term dominance. Analysts also point to past investment cycles, which have produced robust returns for investors. The stock is down 15% today, but is up 300% from recent lows and 1000% over the past decade.

The technical outlook for Meta stock is solid. Earlier this year, the break to new highs signaled a market inflection that could lead to the $665 region or higher in the next twelve to eighteen months. The swing from the low to the breakout point is worth $287 or 311%, providing blueprints for future price movements.

The critical time for Meta stock is now. The market is correcting after a substantial rally and may fall further before rebounding. The critical support target is the previous high, near $380, which may be reached soon. A rebound will likely follow if the market confirms support at this level. Otherwise, Meta stock could collapse through support and fall back into its previous trading range. As analysts back the market, this is not expected. The most likely scenario is that Meta consolidates at or near current levels until further news becomes available later in the year.

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