META Stock is CRASHING After Earnings | BUY NOW?

What's up, guys? Meta, some of you probably saw this coming, right? Dwindling free cash flow. Does that surprise you at all? When you have capex, they're spending on AI. And we've even talked to like Meta going into the Neocloud, but the stock is down 11%. It's funny. Somebody in Discord said, "Meta's crashing after earnings." And I looked and it was down 5%. And I said, "Crashing? That's not crashing. It needs to be down like 10% or more." [laughter] Well, now it's crashing. It's down 11%. And the reason for that, if you look at the earnings, earnings per share, $6.18 versus $722. The reason for that, of course, they're spending money on building out capex, AI capex, revenue, $60 billion versus 60.17. That was a beat. There are a lot of things going on with the market right now. Number one, you have a narrative that basically anybody that spends money on capex and the free cash flow dries up, we want to punish them, right? And so you'd think, okay, well that means the chip stocks, the ones that are bene that are benefiting from this, they should be going higher. Well, we also want to put a hold on that because what about ROI? So basically, like nobody wins, but then on top of it, the Fed today didn't cut rates, but what essentially happened was that you got a signal that there's a good chance that the Fed's going to have to raise rates this year to combat inflation. And part of that is because oil prices are higher with the Middle East tensions and so on. We can go down a whole rabbit hole. This is something we've talked about extensively in the private community. Today I want to focus really on meta, but it's important to understand that macro because that macro is impacting the entire stock market. And we did break break a key level of support today. So if I look at in Eric's watch list, we did break 7,400. So we've been trying to hold 7,400. market was kind of waiting and saying, "All right, we've got a Fed meeting. We've got Mega Cap Tech MAG7 earnings, bunch of, you know, solid earnings reports, big earnings reports this week. So, we're going to sit at 7,400 kind of hold. If all the stars align, you know, we need to we need to capture 7480. That's a key resistance. The market leans bearish." I said this morning on chart day until 7480 is captured and really want it like 7500. If it doesn't do that, expect pressure. So, I said this morning to the community on chart day that more than likely it's there's a higher percentage than not that you're going to see us break 7,400, especially if the stars don't align. If the the Fed meeting doesn't go perfect, if the commentary from the Fed isn't perfect, if you know Meta misses earnings, which we'd had a mixed result on Meta, anything like that where the stars don't align perfectly, you're going to see downside. So 7340, we actually closed at 7316 and the next line of resistance is 7235. Of course, we could always go lower. I think there's a chance you could see 6,900 7,000. I'm not here to scare you or anything. I'm a long-term investor. And the thing is is we haven't really been buying a lot of these these rips recently. We've been trimming and raising cash saying, "Hey, you know, it's probably going to be a pause. Usually the summer months are seasonally weak when you think of August, September, October. Plus, it is midterm elections until November 3rd. So, I would expect continued volatility and I think it will create opportunities for investors longer term. But you have to understand that the Fed raising rates is a big deal. If you remember 2022, it was because of inflation and the Fed raising rates. I don't think we're at those levels by any means, but you know what can happen. So, Meta, if you look at this 27.9% year-over-year, that's solid growth. The problem though, of course, is you've got this miss. So this Q2 gap EPS $618 missed by A14. So obviously the market's not going to like that, especially when the market was down today. If you look at the market across the board, you know, down 1.74% on the NASDAQ, 1.52 on the S&P, Dow Jones 2%. You know, if you look at some of these chip stocks like Micron actually broke a 750 key level support down to 7 $713 after hours and it's crazy because you look at Micron, you can look at the the valuation metrics and say, you know, Micron doesn't look that expensive. You guys have seen me do this before. You know, profitability wise, strong 72% A+ on seeking Alpha, bringing in 952,000 per employee growth 11% A+ growth. Valuation on this, you're talking about a 11.28 gap 4p ratio 03 PEG. And so people will say, well, the market's rigged and this and that because the stock was just what? It was just $1,255 a share at the top. But even after a massive pullback, 30% 40% pullback, it's still up 560% in the past year. And it's still up 158% year to date. And this is the problem is number one, a lot of the retail investors, and I say investors, they're kind of like traders. They're new to the market. They get FOMO because they hear their lift driver talking about, hey, you should buy this stock, you should buy that stock. They come in at the top. they fomochased those highs and then the problem on top of it is leverage was abused and so you have these triple lever bullish ETFs and you've got lots of people using margin and so what happens is you get margin calls and it just accelerates and it just accelerates more and more and more and it gets lower and lower and lower and more margin calls happen more accounts get blown up and it just keeps pushing it down and down and down and the thing about it is at some point like a lot of these people aren't necessar necessarily even wanting to sell. It's number one, the macro's bad. You've got these geopolitical tensions. You've got the Fed that's going to raise rates, right? You've got the fact that Korea is basically blowing up. When you look at the Cosby, major problems over there with their with their stock market right now, something like 50% of the Cosby index is two stocks in South Korea. You know, this is just massive FOMO into these memory type names and a lot of these AI stocks. And so you're going to have an unwind that's going to create pin action and pressure and things are going to go lower than they normally would because of that extra pressure on the margin. And that's just it's going to have to play out. At some point these will wash out and they will be buys and you could see some nice snapbacks on some of these. The thing is though, if the Fed's raising rates, it doesn't necessarily mean it has to be a V-shaped recovery by the end of the year. If things go well, you can see a lot of these stocks quite a bit higher than they are now. But the thing is is they can go a lot lower before they go higher. And I know I'm going to get some stupid comment like, "Oh, this guy's saying the market go higher, market go lower." If you've been doing this for any time at all, you know that nobody's going to be able to predict what's going to happen tomorrow or even next month or the end of this year. What we can do is we can invest in high quality companies and buy prices that we think are attractive. And so one of the ways we can do that, we can look at the fundamentals. And you look at something like Meta, you know, we just saw some of the earnings numbers and these numbers probably haven't updated to the most recent earnings, but profitability 81.9%. Most of Meta is going to be what? Digital advertising. They're trying to expand their business into more things, AR and VR and Oculus, and they're trying to expand into AI data centers, maybe even be in NeoCloud, and that might the earnings calls happen right now. Zuck might talk about that. Hard to say. growth 22% 26% valuation you know it doesn't look expensive 17.96 this peg gap is not great you want this generally to be under one or less is usually attractive right so if I look at price to sales 5.95 but overall if I'm looking at this it's showing an F on seeking alpha but overall if I look at something like a gap 4p ratio of 17.96 I look at the growth I look at the profitability and now it's trading down 10% at 520 49. So is this an opportunity? Where could it go? If I'm looking at a chart on Meta, this is a perfect example of FOMO in full. So FO FOMO is when people want to buy up here and essentially they want to chase. FOMO, fear of missing out. So the stock, you know, literally rips here from $87. This is the end of November 2022. So, this is kind of the end of the bare market in 2022. It rips from $87 all the way up to almost $800, a 10x on Meta. Of course, what goes up usually comes down. And generally speaking, when you've got a chart that looks like that, you're going to have some sort of pullback, which is generally healthy. And if I look at this, what's interesting about it is we got down to 477.86. This is April of 2025 during that kind of flash crash we had V-shaped recovery here in in April 2025. Is it going to look the same here? Hard to say. Probably not. Especially if the Fed starts cutting rates. Is it feasible that we retest this 477 which is also this Fibonacci S3? Fibonacci S3 is 480, you know. So, could it come down to 477? I think the answer is yes. Could it go lower? I think the answer is yes. This is kind of off the table at this point, but let's say longer term. Let's say that you buy the stock at and I can't even go into detail on this because I'm on YouTube, I just realized. So, I can't even go through the scenario because YouTube doesn't want me to do that. But you can figure it out on your own, right? It could take three years, but is there opportunity? It depends. Depends on your thesis on Meta. Do you think that Meta is a good company? Have you researched it? What do the fundamentals say? I think Meta is a good company, but it's not like my highest conviction stock in the world. I just think when there's opportunity in certain stocks like this, I want to bring it to you. We do own a small position in the community portfolio, but it is small. Right now, it's like 1.4%. And I am looking to buy some. In fact, I said earlier today in Discord, I said meta earnings are tonight. More than you know, there's probably going to be some opportunity. And we talked about this on a recent stream where there's a chance that capex is going to be higher in some of these companies and it's going to put pressure on the stock. So of course if you're dollar cost averaging you can probably dollar cost average wherever you feel comfortable. But this S2 Fibonacci is 51895. S3 is 480. Of course you're going to have that psychological support of 500. You know, is it reasonable to think that Meta could come between 475 and 500? I think that's very reasonable. It could even go lower than that. You know, if you get a bare market, you can definitely, you know, push down lower than this 477 kind of line in the sand or support level. Um, this is going back to July of 2024 though at 439. And so, you can see we've had several support areas like in the 450 475 range. So, I would think 450 is another great area of support. And I'm not saying it has to go to 450. I'm saying that if I'm looking for area support 450 475,480 $518.95. And right now, it's 528. Could it hold 525? Absolutely. And this is why you have to have conviction in a stock because if you're a long-term investor and you're using DCA, generally you're buying and you know that if you buy here, it could go down here and you want to buy this entire area. So, generally what I'll do is I'll buy maybe a quarter position. Sometimes if it's a highly speculative like a beta stock or if it's a higher spec stock, this isn't, but if it's one of those, right, where it's more speculative, it's a smaller cap, then I'm going to buy a lot of lots. Sometimes I buy 10 plus lots. In this case, maybe you buy, just to keep it simple, four lots. And so if you bought a lot here, you would kind of figure out the math and say, you know, I might buy here, I might buy here, I might buy here, might buy here. Of course, this is never financial advice, just a hypothetical to show you how somebody might educational purposes to show you how you might dollar cost average into a stock that you want to own as a long-term investor. If this helps, guys, hit the subscribe button, drop me a like, drop me a comment. Have a great rest of your night. We'll see you