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Amazon and Meta: Buy Big Tech Stocks and AI Plays Before Earnings or Wait?
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Today’s episode of Full Court Finance at Zacks dives into the wave of selling that sent the Nasdaq tumbling to start the heart of big tech earnings season on Wednesday. The episode then explores Meta Platforms (META - Free Report) and Amazon (AMZN - Free Report) stock before their upcoming earnings releases to see if investors should buy the top tech stocks before earnings or wait for more selling.
Technology stocks and other first-half standouts tanked on Wednesday, sending the Nasdaq below its 50-day moving average for only the second time in 2024.
The selling came as the busy stretch of technology earnings kicked off after the closing bell on Tuesday, with Alphabet and Tesla.
Image Source: Zacks Investment Research
Tech stocks and the market could experience more selling and volatility throughout earnings season, especially since big tech set the bar very high.
Thankfully, the tailwinds that sent the stock market soaring in the first half remain in place. Any near-term selling represents a healthy recalibration and an opportunity for investors to buy their favorite stocks at discounts.
The two stocks we explore today are tech giants and AI investments.
Meta Platforms, Inc. (META - Free Report) Stock – Q2 Earnings Wednesday, July 31
Meta ((META - Free Report) ), the owner of Facebook, Instagram, and WhatsApp, grew its daily active users by 7% in Q1 to 3.24 billion. Meta grew its ad impressions delivered across its family of apps by 20%.
Meta stands to thrive in a world full of smartphone addicts. Meta is also investing heavily in its AI future. Mark Zuckerberg’s goal is for Meta to win the AI race by rolling out open source artificial intelligence.
Image Source: Zacks Investment Research
Meta shares have soared roughly 400% off the market’s 2022 lows to blow away Alphabet ((GOOGL - Free Report) ) and plenty of tech giants. The stock has also climbed 520% in the past 10 years vs. the Zacks Tech sector’s 310%.
This context helps Meta’s valuation look all the more impressive, with Meta trading at a 63% discount to its highs and 20% below the Zacks Tech sector at 22.4X forward 12-month earnings.
Image Source: Zacks Investment Research
Meta stock has fallen 14% from its early July highs heading into its quarterly earnings release. Meta stock is trading below its 50-day and 21-week moving averages. Meta trades at roughly neutral RSI levels on a 10-year timeframe after hitting its most overbought levels of the last decade earlier this year.
Meta’s recent cooldown makes the stock a potentially more appealing long-term buy-and-hold candidate for investors who can weather near-term volatility. It is worth remembering that Meta has a robust balance sheet and began paying a dividend earlier this year as it focuses on efficiency and profits.
Amazon ((AMZN - Free Report) ) CEO Andy Jassy took over roughly three years ago with a mission to boost the bottom line while honing in on expansion in key growth areas.
Amazon remains the king of e-commerce and its advertising unit is booming. AMZN also runs the world’s largest cloud-computing business, topping rivals Microsoft and Alphabet, helping it thrive throughout the AI supercycle.
Image Source: Zacks Investment Research
Amazon is also diving headfirst into its AI efforts, with plans to devote more capex on its cloud computing and AI infrastructure than e-commerce going forward.
Amazon’s steady cloud computing and AI growth, coupled with its focus on boosting earnings is a winning pitch to Wall Street. Amazon’s earnings outlook has soared over the last year for FY24 and FY25 to help it land a Zacks Rank #1 (Strong Buy).
Amazon stock has skyrocketed 1,000% in the last 10 years vs. Tech’s 300%, Apple’s 800%, and Alphabet’s 480%. Yet Amazon stock is down around 1% in the last three years compared to Tech’s 25% run.
AMZN failed to break out meaningfully above its 2021 highs. Amazon is currently trading 10% below its highs and 22% below its average Zacks price target.
Image Source: Zacks Investment Research
Amazon trades around its 21-week moving average and near neutral RSI levels on a 10-year timeframe. On the valuation front, Amazon trades 95% below its highs and at a 50% discount to its 10-year median at 35.1X forward 12-month earnings.
On top of that, Amazon trades near its lowest forward earnings multiple since the 2008 financial crisis.
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Amazon and Meta: Buy Big Tech Stocks and AI Plays Before Earnings or Wait?
Today’s episode of Full Court Finance at Zacks dives into the wave of selling that sent the Nasdaq tumbling to start the heart of big tech earnings season on Wednesday. The episode then explores Meta Platforms (META - Free Report) and Amazon (AMZN - Free Report) stock before their upcoming earnings releases to see if investors should buy the top tech stocks before earnings or wait for more selling.
Technology stocks and other first-half standouts tanked on Wednesday, sending the Nasdaq below its 50-day moving average for only the second time in 2024.
The selling came as the busy stretch of technology earnings kicked off after the closing bell on Tuesday, with Alphabet and Tesla.
Image Source: Zacks Investment Research
Tech stocks and the market could experience more selling and volatility throughout earnings season, especially since big tech set the bar very high.
Thankfully, the tailwinds that sent the stock market soaring in the first half remain in place. Any near-term selling represents a healthy recalibration and an opportunity for investors to buy their favorite stocks at discounts.
The two stocks we explore today are tech giants and AI investments.
Meta Platforms, Inc. (META - Free Report) Stock – Q2 Earnings Wednesday, July 31
Meta ((META - Free Report) ), the owner of Facebook, Instagram, and WhatsApp, grew its daily active users by 7% in Q1 to 3.24 billion. Meta grew its ad impressions delivered across its family of apps by 20%.
Meta stands to thrive in a world full of smartphone addicts. Meta is also investing heavily in its AI future. Mark Zuckerberg’s goal is for Meta to win the AI race by rolling out open source artificial intelligence.
Image Source: Zacks Investment Research
Meta shares have soared roughly 400% off the market’s 2022 lows to blow away Alphabet ((GOOGL - Free Report) ) and plenty of tech giants. The stock has also climbed 520% in the past 10 years vs. the Zacks Tech sector’s 310%.
This context helps Meta’s valuation look all the more impressive, with Meta trading at a 63% discount to its highs and 20% below the Zacks Tech sector at 22.4X forward 12-month earnings.
Image Source: Zacks Investment Research
Meta stock has fallen 14% from its early July highs heading into its quarterly earnings release. Meta stock is trading below its 50-day and 21-week moving averages. Meta trades at roughly neutral RSI levels on a 10-year timeframe after hitting its most overbought levels of the last decade earlier this year.
Meta’s recent cooldown makes the stock a potentially more appealing long-term buy-and-hold candidate for investors who can weather near-term volatility. It is worth remembering that Meta has a robust balance sheet and began paying a dividend earlier this year as it focuses on efficiency and profits.
Amazon (AMZN - Free Report) Stock – Q2 Earnings Thursday, August 1
Amazon ((AMZN - Free Report) ) CEO Andy Jassy took over roughly three years ago with a mission to boost the bottom line while honing in on expansion in key growth areas.
Amazon remains the king of e-commerce and its advertising unit is booming. AMZN also runs the world’s largest cloud-computing business, topping rivals Microsoft and Alphabet, helping it thrive throughout the AI supercycle.
Image Source: Zacks Investment Research
Amazon is also diving headfirst into its AI efforts, with plans to devote more capex on its cloud computing and AI infrastructure than e-commerce going forward.
Amazon’s steady cloud computing and AI growth, coupled with its focus on boosting earnings is a winning pitch to Wall Street. Amazon’s earnings outlook has soared over the last year for FY24 and FY25 to help it land a Zacks Rank #1 (Strong Buy).
Amazon stock has skyrocketed 1,000% in the last 10 years vs. Tech’s 300%, Apple’s 800%, and Alphabet’s 480%. Yet Amazon stock is down around 1% in the last three years compared to Tech’s 25% run.
AMZN failed to break out meaningfully above its 2021 highs. Amazon is currently trading 10% below its highs and 22% below its average Zacks price target.
Image Source: Zacks Investment Research
Amazon trades around its 21-week moving average and near neutral RSI levels on a 10-year timeframe. On the valuation front, Amazon trades 95% below its highs and at a 50% discount to its 10-year median at 35.1X forward 12-month earnings.
On top of that, Amazon trades near its lowest forward earnings multiple since the 2008 financial crisis.