How will the upcoming recession impact META?

4. Aug.

META

https://www.tradingview.com/x/Fziw5ok6/

Although the macro environment is starting to look more negative for the equity market, I believe this to be one of the outliers that may still have some room to run.

Recent earnings showed a modest increase in spending designated for AI, which was a worry of mine going into earning with Zuckerberg's track record of overspending.

They seem to have investor focus with their current business model. This is truly a money printing machine.

At this time it's clear that any company wanting to spend ad dollars is turning to META first and will likely cut spending elsewhere. META's continued ability to help companies target their customers far exceeds that of any other ad-based company.

In addition to their improvements in ad revenue and daily active users across all their platforms, they have been able to make noticeable gains in both VR and AR markets.

How much longer until other hardware plays like Apple (AAPL) risk becoming obsolete? Obviously, it is way too soon to make a call against AAPL, but it seems they are behind the ball on everything they are rolling out. With AI helping developers create hardware, I think this may start cutting into AAPL's competitive advantage. If this ends up being true, META's development in hardware may begin to pay off.

Looking at the chart, it's hard not to see a double top with likely further downside coming in the future. This has also fallen below its 100-day MA and failed to hold levels above when retested it. If the downward pressure continues, I am going to be a huge buyer between $385 and $400. In the short term, I may buy some out-of-the-money puts with these targets and load up on calls if it retraces to the previous all-time high support.