The NASDAQ Composite fell 0.5% an hour after the open on Thursday, as Meta Platforms dropped by more than 10%. The fall followed first-quarter earnings released late Wednesday.<\/p>\n
Meta reported earnings per share of $10.44, or $7.31 excluding a one-time tax benefit, versus a consensus of $7.11. Revenue rose 33% year on year to $56.3 billion, compared with $55.5 billion.<\/p>\n
Meta lifted its full-year 2026 capital expenditure outlook from $115 billion\u2013$135 billion to $125 billion\u2013$145 billion. It said this was due to higher component prices, including semiconductors, and added data centre costs.<\/p>\n
META shares fell from near $670 to about $600 during Thursday\u2019s session. Meta spent about $72.2 billion on capex in 2025, while its Q2 revenue outlook stayed at $58 billion\u2013$61 billion, implying about 25% growth.<\/p>\n
JPMorgan cut its 12-month price target from $825 to $725. The stock is below the 50-day SMA near $630 and the 200-day SMA above $678.<\/p>\n
Support levels cited were near $582 from November 2025 and $520 from late March. A gap level mentioned was April 29\u2019s low at $663.81.<\/p>\n
The sharp drop in Meta’s stock today has caused a massive spike in volatility. We’ve seen implied volatility on near-term Meta options surge over 45%, making both puts and calls significantly more expensive. This environment makes selling premium, rather than buying it, an attractive strategy for the coming weeks.<\/p>\n
With the stock now below key moving averages, bearish traders may target the support level from the November 2025 plunge near $582. Given the high cost of options, a bear put spread, which involves buying a put and selling one at a lower strike price, could be a cost-effective way to play further downside. This strategy caps both the potential profit and the upfront cost.<\/p>\n
Conversely, the significant premium available makes selling cash-secured puts an interesting play for those who believe the sell-off is overdone. Collecting rich premiums by selling puts with a strike price at or below the late March support of $520 could be a way to either generate income or acquire the stock at a lower price. The updated JPMorgan target of $725 suggests some analysts believe this drop is a long-term opportunity.<\/p>\n
We’ve seen this happen before when the market gets spooked by spending. Looking back from 2025, we recall the historic 26% plunge on February 3, 2022, after the company first outlined its massive metaverse investment plans. It took the stock well over a year to reclaim those highs, reminding us that concerns over heavy capital expenditure can weigh on sentiment for more than just a few sessions.<\/p>\n
This appears to be a company-specific issue, not a wider market panic. While Meta fell over 10%, the broader NASDAQ only dipped by 0.5%, indicating that the concern is isolated to Meta’s aggressive AI spending plans. This allows traders to focus their strategies on a single stock’s story without necessarily betting against the entire tech sector.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" NASDAQ slid 0.5% as Meta sank 10% after earnings; raised 2026 capex outlook, prompting JPMorgan target cut.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71],"tags":[],"class_list":["post-45935","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t