- Meta dropped sharply on Friday, extending post-earnings losses after missing profit expectations despite stronger revenue.
- Analysts remain divided on the outlook, with support near $600 seen as a potential long-term buying opportunity once stability returns.
Meta continues to struggle during the Friday session, dropping yet again and losing almost 3% at one point during the day. The earnings call on Wednesday was a huge surprise to the downside, as traders had anticipated $6.72 profit per share but were met with a significant miss. While revenue came in slightly stronger, it wasn’t enough to offset the earnings disappointment.
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Artificial Intelligence and the Potential Bubble
There are now growing questions about artificial intelligence and whether we may be in a bubble, which naturally influences Meta’s valuation. The market gapped lower after the poor earnings call and is now trading below the 200-day EMA. Despite the weakness, some analysts remain bullish. UBS, for instance, raised its price target to $915, while TD Cowen and Citigroup lowered theirs to $810 and $850, respectively. The wide range of targets highlights just how divided sentiment is around the stock.
The disappointing third-quarter earnings could prove to be a one-off, but it’s also possible that Meta’s stock had simply run too far ahead of itself. I suspect that we will eventually find a solid buying opportunity. The $600 level looks particularly intriguing and could serve as a strong support area for a potential bounce.
That being said, I would wait to buy Meta on the right side of the “V,” allowing the market to establish a clear floor before stepping in. Meta remains a major stock to watch, and eventually, I think we’ll see an attempt to fill the gap and move back toward the $750 level. For now, though, patience is key—let Meta show when it’s time to start buying.
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