How to trade Meta stocks after the first quarter performance
Shares in Meta have fallen more than 75% from record highs in July 2021 to multi-year lows in October 2022. However, in the first quarter of 2023, the share price closed up 76%. Learn more about the reasons for this outperformance in whether analysts think more upside or downside is to come.
| arrow: | Meta Platform Inc |
| Code in accounts Invest.MT5: | META |
| The history of the idea: | 4 April 2023 |
| Duration: | 6-1 Months |
| Entry level: | $218.00 |
| target level: | $307.00 |
| The transaction volume in the account: | Limit 5% |
| Risks: | High |
The Invest.MT5 account allows you to buy actual stocks from 15 of the largest exchanges in the world.
All trading is high risk and you can lose more than you risk in a trade. Never invest more than you can afford to lose because some trades will lose and others will win. Start with small trades to understand your risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Meta Stock Trading After First Quarter Performance?
Meta shares are up 76% in the first quarter of 2023, well above the next best performer of FAANG shares which are up nearly 26%. This is a huge turnaround from the bear market crash that Meta shares faced in 2022.
There were several reasons attributed to the rise in its share price. Meta - along with most other tech giants - has announced a massive wave of job cuts. More than 21,000 employees are set to lose their jobs in two phases. While this is unfortunate, it tends to be a positive for shareholders as any savings can go into growth or the bottom line.
Over the past few years, Meta has lost ground in the social platform space to TikTok. However, TikTok is now facing scrutiny from lawmakers in the US and UK who question its long-term future. Investors see this as a potential for Meta's Facebook - one of the original social platforms.
In its latest fourth-quarter earnings report, Meta missed analysts' appreciation but announced a $40 billion share buyback. This is a form of shareholder return in which companies buy back their shares to reduce the number of shares on the open market and thus increase the value of the remaining shares.
CEO Mark Zuckerberg stated that 2023 is the "year of efficiency" helping the stock soar more than 18% after its earnings release. However, concerns remain. Meta lost about $10 billion in ad revenue last year because of Apple's new privacy policies for its iPhones. While Meta is now using AI to target users with much better ads, it remains to be seen if they can make up for what's already been lost.
Another concern is the cash-burning project Metaverse, which lost $13.7 billion last year and $10.2 billion in the previous year. Investors may be hoping for more of a shift to the artificial intelligence (AI) that helped stocks like Nvidia soar 90% in the first quarter alone.
A lot of good Meta news may already be priced into the stock, but there is still a chance the trend will continue if it can deliver on its promises to shareholders.
Meta Stock Forecast - What Do Analysts Say?
According to analysts polled by TipRanks for expectations for Meta stock in the past three months, there are currently 38 Buy ratings, 7 Hold ratings, and 3 Sell ratings on the stock. The highest expected price level for Meta stock is $307 and the lowest price target is $110.
The average price target for the Meta stock forecast is $231.38.
Source: TipRanks, 4 April 2023
An example of a Meta stock trading idea
An example trading idea for Meta share price could be as follows:
Buy the stock on a break above $218.00 to allow for the current volatility.
The target is just below the analyst's highest price target of 307.00.
Keep your risk as small as a maximum of 5% of your account total.
Timeline = 1-6 months
If you buy 10 shares of Meta:
If target reached = $890.00 profit potential ($307.00 - $218.00 * 10 shares).
Remember, markets go up and down and the stock price is unlikely to go up in a straight line. In fact, it could go down a lot more before it goes up, especially given how high the Meta stock price has already been.
Make sure you practice good risk management and always know how much you can lose trading 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 starting from $0.02 per share. This means that buying 10 shares of Meta stock will result in a commission of $0.20 ($0.02 * 10 shares) for executing a transaction per side.
There is a low minimum transaction fee of $1. Therefore, the example trade idea above will result in only $1 commission overall!
How to buy Meta shares 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 minimum commission of just $1 on US stocks.
Open an Invest.MT5 account to access the trading room.
- Click Trade in one of your live or demo accounts to open the web platform.
- Find 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 trade ticket to enter your trade size, stop loss and take profit.
Do you see the price of Meta stock moving in a different way?
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