Meta Platforms (NAS 100:META) also releases earnings on Wednesday, with the stock moving higher from recent lows.
META – Daily Chart
The price of META has jumped above its recent resistance at $733.70, and the path to the $800 level is clear if market sentiment remains positive.
The company’s progress in AI will be the social media giant’s key focus, and investors will be looking for signs that its considerable investments in the sector are paying off. Meta has expanded its capital expenditures twice this year to build additional data centres. The company is also expected to report high compensation packages for AI workers.
Bank of America analysts are looking for a revenue beat of $50 billion, which would exceed the consensus. The bank sees ad gains as the key driver of the company’s performance.
Meanwhile, analysts expect Meta’s earnings per share to be $6.71. That would be higher year over year but down from the previous quarter. There have also been reports of job cuts and hiring freezes, which may signal that cost-cutting is needed to fund the AI splurge.
Wall Street analysts are also strongly bullish on Meta ahead of the results, with only one of the 21 analysts tracked showing a hold rating on the stock. The average upside target suggests an 18% move to $873. Meta shares have gained 25% this year, lagging only Tesla and Alphabet amongst the so-called ‘Magnificent 7’ tech stocks.
It may be a headwind for Meta that Netflix reported in-line revenue and fell by-10% last week. That was related to subscriber numbers, but ad revenue was obviously predictable, and traders were quick to punish the stock.
