When Meta the parent company of Facebook announced its quarterly earnings results last week, hell was let loose. Though the tech giant exceeded its earnings projections, it also revealed significant new investments in the advancement of AI technologies for its goods which resulted in a sudden moderation in its share price.

Although the company’s AI expenditures have increased advertising revenue over the past year, investors are worried that the business is getting ready to resume the spending patterns of 2021 and 2022, which destroyed share profitability.

Many traders are still trying to “buy the dip” here despite recent elevation above the $450 support level, price action offers much better guidance. The latest price actions highlight the market still needs to view this as a long-term purchasing opportunity. Since short-term traders were still trying to sell their shares, selling pressure quickly followed Meta’s initial surge.
With the stock’s trading and options volume declining, the stock now looks poised to consolidate at least below the $500 mark for the upcoming few weeks. The drop in activity implies that investors are still hesitating to pull the trigger.

The Meta share price is expected to face pressure from broader market weakness, breaking the support level at $450 and aiming for $400. This is the price at which investors might start adding shares to their portfolios aggressively.
Oppenheimer “reiterated” their strong buy recommendation on the shares, lowering their target price from $585 to $550. This means that only one company is left to defend the shares.  61 analysts that cover the stock have an average target price of $522, roughly 12% higher than the current price.
That being said, investors await more inflation and the conclusion of the earnings reports from other large-cap tech companies. Look for shares to see if there is investor appetite for the stock at $400 and technical support.