We’re Locking in Big Gains Ahead of Meta’s Connect Event Wednesday

Symbol	Transaction Type	# Shares Traded	Recent Price $	Shares Owned After Trade	% Portfolio
META	Sell	40	747.29	297	3.5

After you receive this alert, the Pro Portfolio will sell 40 shares of Meta Platforms (META) at or near $749. Following the trade, we will own 297 META shares, accounting for roughly 3.5% of the Pro Portfolio’s assets.

Following our remarks yesterday about the overbought condition for the shares of Meta, one that was fueled by the position of Meta’s new Muse AI model on Apple’s (AAPL) app store, the shares are moving higher again Tuesday, pushing them deeper into that condition.

In our opening comment this morning, we discussed some of the opportunities as well as hurdles Meta will face with Muse and at its Meta Connect event that begins Wednesday. But following the more than 38% move in the stock in the last month and the ensuing relative strength index reading at over 78, market expectations have been ratcheted up.

That is prompting us to do some prudent register ringing, locking in a high double-digit gain on META. Following the trade, we will still have have meaningful exposure to META and we continue to see it benefiting from the ongoing shift to digital shopping and management expanding that across more of its platforms. We do see Meta leveraging AI to drive subscription businesses, enhance advertising business and drive greater internal productivity.

But again, the pronounced move in META shares means expectations have risen considerably and that leaves room for the market to be underwhelmed. There is also the competitive response from other AI companies that could impede Meta from reaching lofty Wall Street expectations. We are already reading that OpenAI is mulling a personal AI assistant to compete with Meta’s Muse. Odds are that others are doing the same, exhibiting the herd-like mentality seen when a new new thing emerges.

When Mark Zuckerberg takes the stage at Meta Connect, we’ll be interested in hear some of the potential revenue models associated with Muse. As we think about what is revealed, we’ll be sure to remember that free use and downloads don’t necessarily translate into a 1 to 1 relationship paid/subscription use. How Meta addresses privacy and trust will be a key factor in that conversion, and as we discussed earlier today, currently consumers are not rushing to share private and sensitive data with the company.

Stepping back, the reception over the last several days for Muse validates that consumer AI adoption and usage is primed to accelerate if privacy and trust concerns are addressed. This means we should be ready to contrast offerings from Meta, Anthropic, OpenAI, Google (GOOGL) and others.

We’ll track those developments as well as the impact on AI adoption and more importantly usage metrics, and what those figures mean for data-center capacity utilization levels, chip demand, and networking solutions. And on that note, we’ll reiterate the point we made yesterday when talking with the Schwab Network that while AI is a big tailwind for data center, it isn’t the only one. Cybersecurity, robotics, autonomous driving are others as is the continued shift to streaming video consumption from broadcast.

As we lock in this slice of gains on META, we will hike our checkpoint level to $590 from $530.

We are also keeping close tabs on our shopping list, but also waiting to to gauge the market’s reaction to President Trump’s U.N address today, the one from Iran tomorrow, and subsequent comments from both.

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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade’s executed price here. Be sure to toggle the chart to sort by Purchase Date.)

At the time of publication, TheStreet Pro Portfolio was long AAPL, GOOGL, and META.