What Happened?
Shares of social network operator Meta Platforms (NASDAQ:META) fell 6% in the morning session after markets tumbled, extending the weakness from the previous week as concerns over the ongoing trade war continued to spread. On Sunday, March 9, 2025, President Trump fielded questions regarding recession worries on FOX News, calling the market struggle "a period of transition," but that didn't do much to calm investors. The sell-off was particularly pronounced in the tech sector, with the Nasdaq falling 3% into correction territory, while the S&P 500 also posted a 2% decline.
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What The Market Is Telling Us
Meta’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock dropped 17.2% on the news that the company reported first-quarter results with revenue guidance for the next quarter, missing analysts' expectations. Meta also raised its forecasted operating expenses and capital expenditures for the full year. The increased costs were related to the company's AI infrastructure.
On the other hand, Meta delivered solid revenue, operating profit, and EPS growth, which beat analysts' estimates. During the quarter, Meta released its AI assistant, Meta AI. This product was rolled out across its family of apps and powered by Llama 3, an open-source large language model that is a ChatGPT competitor. The product was quite exciting and we recommend readers to try it out. Overall, this quarter's print was solid, but the weaker expected revenue for next quarter and higher expenses for the full year spooked investors.
Meta is down 1.4% since the beginning of the year, and at $590.92 per share, it is trading 19.8% below its 52-week high of $736.67 from February 2025. Investors who bought $1,000 worth of Meta’s shares 5 years ago would now be looking at an investment worth $3,316.
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