How to Trade Meta After Q1 Performance
Meta Platforms was the best performing FAANG stock in the first quarter of 2023. FAANG is the acronym for tech stocks Facebook (now Meta), Apple, Amazon, Netflix and Google (now Alphabet) and was created by the host of “Mad Money” on CNBC Jim Cramer. He has now updated the acronym to MAMAA to represent the biggest tech stocks: Microsoft, Alphabet, Meta, Amazon and Apple.
Shares in Meta were down more than 75% from its record high in July 2021 to a multi-year low in October 2022. However, in the first quarter of 2023, the share price closed 76% higher. Learn more about what led to this outperformance and whether analysts believe more upside or downside is to come.
|Stock:||Meta Platforms Inc|
|Symbol for Invest.MT5 Account:||META|
|Date of Idea:||4 April 2023|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Trading Meta Stock After Q1 Performance
Meta shares were up 76% in the first quarter of 2023, far above the next best performer of the FAANG stocks Apple which was up around 26%. This is a huge turnaround from the bear market crash Meta shares faced in 2022.
There have been a few reasons attributed to the rally in its share price. Meta – along with most other tech giants – announced a big wave of job cuts. More than 21,000 employees are set to lose their jobs over two phases. As unfortunate as this, it tends to be a positive for shareholders as any savings can go into growth or the bottom line.
Over the last few years, Meta lost ground in the social platform space to TikTok. However, TikTok is now facing scrutiny from law makers in the US and the UK doubting its long term future. Investors see this as a potential for Meta’s Facebook – one of the original social platforms.
It its latest fourth-quarter earnings report, Meta missed analyst estimates but did announce a $40 billion share buyback. This is a form of giving back to shareholders in which companies buy back their own shares to reduce the number of shares in the open market and thereby increasing the value of the remaining shares.
CEO Mark Zuckerberg stated that 2023 is the ‘Year of Efficiency’ helping the stock to surge more than 18% after its earnings release. However, concerns still remain. Meta lost around $10 billion in advertising revenue last year due to new privacy policies from Apple for its iPhone. While, Meta is now using AI to target users with ads a lot better it remains to be seen if it can pickup the shortfall already lost.
Another concern is the cash burning Metaverse project which lost $13.7 billion last year and $10.2 billion the year before. Investors may be hoping for more of a shift into artificial intelligence (AI) which helped shares such as Nividia surge 90% higher in the first quarter alone.
Much of the good news regarding Meta may already be priced into the stock but there is still a chance for the trend to continue if it can fulfill its promises to shareholders.
Meta Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Meta stock forecast in the past 3 months, there are currently 38 buy, 7 holds and 3 sell ratings on the stock. The highest price level for a Meta stock forecast is $307.00 with the lowest price target at $110.00.
The average price target for a Meta stock forecast is $231.38.
An Example Trading Idea for the Meta Stock Price
An example trading idea for the Meta share price could be as follows:
- Buy the stock on a break above $218.00 to allow for current volatility.
- Target just below the highest analyst price target of 307.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Meta shares:
- If target is reached = $890.00 potential profit ($307.00 - $218.00 * 10 shares).
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how far Meta’s share price has already risen.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Meta stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Meta Stock in 4 Steps
With Admirals, you can buy shares in companies like Meta with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the Trader’s Room.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Click on the banner below to trade Meta stock today! ▼▼▼
Do You See the Meta Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Meta's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals’ investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With a view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for the prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst, Jitanchandra Solanki (analyst), (hereinafter “Author”) based on their personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.