ETF Winners Amid Last Week's Record Loss in "Magnificent 7"
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 22 2024
0mins
Should l Buy META?
Source: Business Insider
- Technology Stocks Performance: Last week saw a collective loss of $950 billion from major tech stocks, surpassing the previous record loss in January 2022.
- Individual Performances: Tesla, Nvidia, Apple, Microsoft, Amazon, Alphabet, and Meta experienced significant market cap reductions due to stock declines.
- Semiconductor Market Impact: The semiconductor sector faced losses, with Nvidia's significant decline indicating potential sustained downturn.
- Wall Street Volatility: Heightened volatility and uncertainty were observed due to concerns over inflation and Federal Reserve policy shifts.
- U.S. Retail Sales Data: U.S. retail sales exceeded expectations in March, showing growth and positive revisions for February data.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 668.690
Low
655.15
Averages
824.71
High
1117
Current: 668.690
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Future Outlook: Should Meta's stock gain momentum and rise quickly in the coming year, it may contemplate executing a stock split, aligning itself with other tech giants to attract more investors.
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- Strategic Partnership Driving Growth: The $5 billion strategic partnership with Brookfield Asset Management enables Bloom to offer energy-as-a-service across Brookfield's trillion-dollar infrastructure portfolio, driving its product backlog to $6 billion, reflecting strong market demand.
- Production Capacity Expansion: Bloom Energy plans to double its production capacity from 1 GW to 2 GW by the end of 2026, and successfully delivered products to Oracle in just 55 days, far exceeding its 90-day promise, further solidifying its market position.
- Future Earnings Outlook: Despite Bloom Energy's high valuation, analysts project its EPS to reach $2.92 in 2027 and $4.58 in 2028, indicating that the company will continue to benefit from strong growth potential in the coming years.
See More
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- Backlog Growth: Bloom Energy's product backlog surged by 60% in Q4 to $6 billion, bringing total backlog to $20 billion, indicating a robust market position amid soaring energy demands from data centers.
- Strategic Partnership: The $5 billion partnership with Brookfield Asset Management enables Bloom to provide energy services across its trillion-dollar infrastructure portfolio, further solidifying its leadership in the energy market.
- Capacity Expansion: Bloom plans to double its production capacity from 1 GW to 2 GW by the end of 2026, raising its 2026 revenue guidance from $3.1 billion to $3.3 billion, reflecting strong confidence in future growth.
- Optimistic Market Outlook: Despite a high P/E ratio of 107, analysts project EPS to reach $2.92 in 2027 and $4.58 in 2028, indicating that the company will continue to benefit from strong electricity demand growth in the coming years.
See More
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- Gloomy Q1 Outlook: The company forecasts Q1 revenue between $951 million and $971 million, below the average analyst estimate of $980.6 million, reflecting market concerns about its future growth potential, which may further erode investor confidence.
- Stock Price Volatility: Following the earnings report, Pinterest shares plummeted over 18% in after-hours trading, and have already declined about 28% since the beginning of the year, indicating significant market unease regarding its financial health, reminiscent of the nearly 22% drop after its Q3 report last year.
- Layoffs and Restructuring Plans: Pinterest announced it would lay off under 15% of its workforce and reduce office space to redirect resources towards artificial intelligence, aiming to enhance competitiveness through transformation initiatives, although the effectiveness of this strategy remains to be seen.
See More
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- Tech Sector Retreat: U.S. stocks experienced a significant decline on Thursday, with the S&P 500 down 1.57%, the Dow Jones down 1.34%, and the Nasdaq 100 down 2.04%, primarily driven by a sell-off in the Magnificent Seven tech stocks, indicating concerns over the profitability outlook in the tech sector.
- Cisco Systems Warning: Cisco Systems saw its stock plummet over 12% after forecasting that rising memory chip prices would erode profitability, raising investor concerns about future performance and potentially diminishing market confidence.
- Weak Economic Data: Initial jobless claims in the U.S. fell by 5,000 to 227,000, below the expected 223,000, while January existing home sales dropped 8.4% month-over-month to 3.91 million, marking a 16-month low, which reflects signs of economic slowdown that could impact market sentiment.
- Positive Earnings Season: Despite the overall market downturn, over 76% of S&P 500 companies that reported earnings exceeded expectations, with Q4 earnings projected to grow by 8.4%, indicating strong corporate profitability that may provide support for the market.
See More
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- Surge in Capital Expenditure: Top hyperscalers are expected to increase capital expenditures by 70% this year, with Amazon, Alphabet, Meta, and Microsoft planning a combined spending of over $600 billion, indicating a strong commitment to AI infrastructure investment.
- Mixed Market Reactions: Despite the significant increase in capital spending, Amazon and Microsoft's shares have dropped 12% and 16% respectively, while Alphabet's stock is down less than 1% and Meta's has risen by 1%, reflecting investor concerns about the timing of returns on these investments.
- Infrastructure Investment Opportunities: With spending accelerating, investors are drawn to
See More
