Meta Platforms Inc (NASDAQ: META) recently made headlines with its latest earnings report, beating Wall Street’s earnings expectations while marginally surpassing revenue projections.
The tech giant reported earnings of $4.71 per share, exceeding expectations by nearly 10%. Impressively, its revenue for the quarter ending March 31 reached $36.46 billion, a notable increase from $28.65 billion a year earlier, marking a significant 27% gain year-over-year. Additionally, Meta reported a rise in Family Daily Active People to 3.24 billion in the first quarter, reflecting a 7% increase compared to the previous year. Ad impressions also saw a substantial uptick, rising by 20% year-over-year, with the average price per ad up by 6%.
Despite these positive metrics, the company’s share price has plummeted nearly 14% in pre-market hours, resulting in a loss of almost $200 billion in market capitalization. This decline was likely attributed to forecasts of higher expenses and lighter revenue than expected, as investors weighed the cost-benefit analysis of Meta’s AI roadmap against its financial performance. The company anticipates increased capital spending to support its artificial intelligence initiatives, indicating a strategic focus on long-term growth and innovation.
Technical
Meta Platforms has been riding a bullish wave, with its share price soaring by nearly 40% year-to-date, fuelled by a robust uptrend.
Surpassing the 100-day moving average, the share price surged to an all-time high of $531.49 per share, reflecting the market’s optimism and bullish sentiment. However, this bullish momentum hit a roadblock as overbought RSI conditions emerged, triggering a downturn in the share price.
As a result, the share price experienced a significant pullback, plummeting by as much as 10% from its peak. Nevertheless, support emerged at the $473.40 per share level, signalling a potential reversal in fortunes. Indeed, a rebound occurred, with the share price retracing towards the 61.80% Fibonacci Retracement Golden Ratio level. However, negative sentiment surrounding the stock led to a bearish reversal at the Golden Ratio. The share price broke below the support level in pre-market hours, aligning with the 100-day moving average. Should downside momentum persist, the $406.36 per share level could serve as a point of interest to the downside. In contrast, a resurgence of upside momentum could spark a rebound, with the $473.40 per share level potentially attracting interest to the upside.
Summary
Despite solid financial results, Meta Platforms faced a significant setback as its share price plummeted nearly 14% in pre-market hours, erasing almost $200 billion in market capitalization. The $406.36 per share level could serve as a point of interest to the downside if bearish forces persist.
Sources: Meta Platforms Inc, Reuters, CNBC, Forbes, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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