Meta: Technical Strength On The Back Of Strong Fundamentals
Meta Platform’s quarterly earnings release received a lot of attention. Obviously, its position as a major player in the AI space will always garner it a lot of attention, but it would be especially interesting due to what it might say about AI spending in light of DeepSeek's emergence.
The answer is that it would keep plowing ahead, actually increasing its forecasted 2025 capex spending to around $65 billion.
It beat both revenue and earnings forecasts for the quarter and, while its light guidance for the current quarter caused some concern, the company’s enthusiastic outlook for AI resulted in a nice pop for the stock. Meta has had one of the better revenue stories in the current AI boom and its re-commitment to AI development positions it to be a leader in this industry.
When we last visited this stock back in September, it was hitting a short-term ceiling around the $540 mark after its momentum had stalled out. Since then, it’s clearly pushed through that barrier and then some.
source: StockCharts
Right around the time we profiled Meta, it broke through that $540 level and never looked back. In fact, it used that level as support around Thanksgiving and used it as a springboard to push higher again. Over the past several months, every consolidation in the stock price has led to a new high.
Since the beginning of 2025, Meta has spent most of its time in technically positive territory. The MACD indicator1 has accelerated into very strong positive momentum (its highest reading in nearly one year), although it’s been holding consistently steady for most of the past several months. Even after the initial post-earnings bounce, Meta has maintained that steady momentum through the $700 level.
The Chande Trend Meter2 is similarly looking very strong at the moment. Readings up in the 90s are rarely sustainable for long, but Meta has been holding on to it with a firm grip for a little while now.
The RSI3 has pushed into overbought territory, suggesting that another period of consolidation might be in order here. That makes sense given how the stock has already advanced roughly $100 per share just this year. Even though relative strength may moderate in the near future, Meta has demonstrated enough positive momentum that it may just consolidate again as opposed to experiencing a full-blown pullback.
Overall, we feel Meta is looking pretty strong here. The stock has experienced multiple “consolidate and advance” periods, which bodes well for future technical strength. The short-term concern is that the stock has gone too far too fast, but recent price action suggests that the stock may be a better bet to stagnate in order to digest recent gains as opposed to giving a chunk of those gains back altogether. The revenue and earnings story is positive as is the AI story and we feel that Meta is on its way to being a winner in the AI revolution.
If you’re looking for an easy way to add enhanced Meta Platforms exposure to your portfolio, consider the GraniteShares 2x Long META Daily ETF (FBL).
1According to Investopedia, the MACD (or moving average convergence/divergence) indicator is “a technical indicator to help investors identify price trends, measure trend momentum, and identify entry points for buying or selling.”
2According to ChartSchool, the Chande Trend Meter “assigns a numerical score to a stock or other security, based on several different technical indicators covering six different timeframes. Distilling all this technical information down into a single number provides an easy way to identify the strength of the trend for a given security.”
3According to Investopedia, the relative strength index (or RSI) “measures the speed and magnitude of a security's recent price changes to detect overbought or oversold conditions in the price of that security.”
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