Meta Platforms Stock Jumped 29% In One Week, What’s Next?

Meta Platforms’ stock (NASDAQ: META) has gained 29% in the last week, outperforming the S&P 500 (up 2.1%) by a huge margin. Further, the same trend was observed over the last ten days (34% vs 3.7%) and one month period (47% vs 7%). 

The social media giant surpassed the consensus estimates in the recently released fourth-quarter results. While it reported a 4% decline in net revenues to $32.17 billion, the number was still above the expected mark. Along similar lines, the average revenue per user (ARPU) of $10.86 was lower than the previous year’s figure but better than the estimates. Further, the daily active users (DAU) improved by 4% y-o-y to 2 billion. In addition, the firm announced a share repurchase plan worth $40 billion in the quarter. 

Although a big chunk of stock growth came after the earnings beat last week, investor sentiment has remained positive toward the stock since January. This was partly due to cost optimization measures and partly because of a slight drop in inflation reading (down 0.1%) on a month-on-month basis in December.

Now, is META stock set to rise further, or could we expect some correction? We believe that there is a more than 90% chance of a rise in META stock over the next month (21 trading days) based on our machine-learning analysis of trends in the stock price over the last ten years. See our analysis on Meta Platforms’ Stock Chance of Rise.

Twenty-One Day: META 47%, vs. S&P500 7%; Outperformed market

(less than 1% likelihood event; more than 90% probability of rise over next 21 days)

• Meta Platforms stock increased 47% over the last twenty-one trading days (one month), compared to a broader market (S&P500) increase of 7%
• A change of 47% or more over twenty-one trading days is a less than 1% likelihood event, which has occurred 11 times out of 2517 in the last ten years
• Of these 11 instances, the stock has seen a positive movement over the next twenty-one trading days on 11 occasions
• This points to a more than 90% probability for the stock rising over the next twenty-one trading days

Ten Day: META 34%, vs. S&P500 3.7%; Outperformed market

(less than 1% likelihood event, 11% probability of rise over next 21 days)

• Meta Platforms stock increased 34% over the last ten trading days (two weeks), compared to the broader market (S&P500) gain of 3.7%
• A change of 34% or more over ten trading days is a less than 1% likelihood event, which has occurred 9 times out of 2518 in the last ten years
• Of these 9 instances, the stock has seen a positive movement over the next ten trading days on one occasion.
• This points to a 11% probability for the stock rising over the next ten trading days

Five Day: META 29%, vs. S&P500 2.1%; Outperformed market

(less than 1% likelihood event)

• Meta Platforms stock gained 29% over a five-day trading period ending 02/07/2023, compared to the broader market (S&P500) increase of 2.1%
• A change of 29% or more over five trading days (one week) is a less than 1% likelihood event, which has occurred 5 times out of 2517 in the last ten years
• Of these five instances, the stock has seen a positive movement over the next five trading days on five occasions.

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[1] Month-to-date and year-to-date as of 2/8/2023
[2] Cumulative total returns since the end of 2016

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