Here's Our Plan for Bullpen Name Meta as the Stock Collapses
While it would be tempting to leap into the shares now, we'll wait for guidance from other earning reports later today.
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* Meta’s spending plans hit the market but are tailwinds for these two portfolio holdings.
* Here’s our plan for Bullpen resident META.
Equity futures point to a weak start when the stock market opens later this morning, following a string of weaker-than-expected guidance that in some cases includes higher spending relative to market forecasts.
The standout example was Meta META, which saw its shares sink double digits in after market trading last night. From our perspective, Meta indicated it would increase its spending levels for the year by up to $10 billion to support infrastructure investments to support its AI investments.
This confirms the thought we are in the midst of an AI-arms race, which leaves our shares of Nvidia NVDA and Marvell MRVL well positioned.
We are likely to get some questions about Meta shares in part because they are in the Bullpen but also given how widely held they are. While it would be tempting to leap into the shares today, with earnings tonight from Microsoft MSFT, Alphabet (GOOGL), Intel INTC, and others, should their guidance follow that of Meta, but also IBM IBM and ServiceNow NOW and come up short, we could see META shares trade off further.
With that in mind, when you look at the chart, you can see a hefty gap near the $400 level with the next layer of support at the 200-day moving average that is near $372.
In yesterday’s video, we shared that even though we are still on the path to start reducing the portfolio’s exposure to its inverse ETF positions, our concern over March quarter guidance and the nervous market mood led us to maintain those positions. That prudent thinking is serving us well this morning, and Meta’s surprise has us thinking we will want to hold those inverse ETFs as Big Tech earnings continue to roll in this week and next.
At the time of publication, TheStreet Pro Portfolio was long MSFT, NVDA and MRVL.
