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- 📈 $META: 20% Jump w/ Room to Run
📈 $META: 20% Jump w/ Room to Run
Happy Chewsday,
As mentioned, last week was a huge week for tech companies! Meta and Nvidia shot up. Apple got a few downgrades
Shout outs to Kenny for noting that Microsoft should get the same recognition as FAANG in the weekly poll.
Featured Stock of the Week
A note that neither Underwriter nor this newsletter provides investing or trading advice. Please consult with a financial professional before making investment decisions. By reading, you agree to not take this as financial advice and assume all risk.
META: Meta $459.41
Our featured stock of this week is Meta.
Meta jumped 20% last week -and Goldman, Barclays and Citigroup think it still has room to run up.
$40B in Quarterly Revenue : 25% Increase
Meta has somehow grown revenue for three consecutive quarters. Year-over-year, revenue has grown 16% The revenue growth was driven in part by a number of new products like Threads, Ray-Ban Smart glasses and Quest 3. Over 3.1 billion people utilize a Meta product (WhatsApp, Facebook, Instagram, Quest etc) each day. That volume enhances their ad product by giving Meta an almost omniscient awareness of trends, culture and preferences. |  |
+10% Price Targets and New Revenue Source
Meta’s Reality Labs -the same group that oversees product like their VR headset and Ray Ban glasses passed $1B in revenue for the first time. This could be a bigger deal than it seems as it could mean that Meta is finding new sources of meaningful revenue. The Meta Quest VR headset may be the beneficiary of Apple’s Vision Pro marketing. The Quest VR headset is 7x cheaper than the Vision Pro. History has many examples of cheaper alternatives going mainstream by streamlining behind their more expensive competitors shifting consumer behavior (Android, Chevy Bolt, Hulu, Zara). Some of the world’s largest investment banks like Goldman, Barclays and Citigroup have all given Meta new price targets either at or above $500 (~10% gain). Other than the ad revenue growth, investors may be eyeing these new revenue sources as growth opportunities. |  |
8% Decrease in Expenses
Meta went through an unfortunate series of large layoffs. Mark Zuckerberg has continually titled the last year as the year of efficiency. Even with a headcount reduction of 22%, Met has seen a 28% increase in ad impressions and almost 4 billion people actively using a Meta app within a month. Dropping costs while accelerating revenue growth surely adds to the positive outlook on Meta. |  |
Major Market News
Earnings Week for: Disney, Uber, PayPal and Pepsi.
made with Midjourney, Runway ML and Descript
Wednesday, Feb 7th - US Trade Deficit
What: Analyzes the difference in what we import vs export.
Current state: The current US trade deficit is at a negative $64B. We’ve spent decades importing a lot of goods.
Reading: Ideally, our trade deficit continues to shrink as that will mean the US is making more money exporting than it spends on imports. Investors look at this number as a measure of economic activity as rising imports could mean the US is lacking the tools, talent, infrastructure, energy, innovation etc to make said import domestically.
Source: Bureau of Economic Analysis
Thursday, Feb 8th - Initial Jobless Claims
What: Measures how many people filed for unemployment for the first time in the last week
Impact: A growing number is bad as it likely means that many are struggling to find work and that economic activity is slowing.
Source: Bureau of Labor Statistics
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A note that Underwriter and this newsletter is not investing or trading advice. These are stocks and information we find interesting. Please consult with a financial professional. By reading, you agree to not take this as financial advice and assume all risk. Futures, stocks, bonds trading of any kind involves a lot of risk. No guarantee of profit is made. In fact, you may lose your entire investment. We guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. Reading and using this newsletter or any of my publications, you are agreeing to these terms. Any screenshots used here are the courtesy of Underwriter. The data, quotes and information used in this blog is from publicly available sources and could be outdated or outright wrong - I do not guarantee accuracy of this information.