Meta Platforms (META) saw a 2.8% drop in stock price on Tuesday, ending its record-setting 20-day winning streak. The stock closed at $716.37, marking its first decline since January 16. During the impressive streak, Meta’s shares surged by more than 20%, and it marked the longest consecutive gain streak for the company, surpassing its previous 11-day run in September 2015, according to Dow Jones Market Data.
The rally had been fueled by a strong performance in Meta’s fourth-quarter results, which exceeded earnings and sales expectations. Additionally, Meta CEO Mark Zuckerberg had announced plans to allocate $60 billion to $65 billion for capital expenditures this year, with a focus on AI infrastructure, a significantly higher amount than originally projected.
So far this year, Meta’s 23% gain has far outpaced the other “Magnificent Seven” tech stocks.
What Caused the Decline?
The cause of Tuesday’s stock drop remains unclear, especially as the company had unveiled ambitious plans on Friday. Meta revealed intentions to build a vast undersea internet cable, and there were reports that its Reality Labs division was forming a robotics team focused on humanoid-style robots. Despite this, shares had closed higher on Friday following the announcements.
In a note to clients, Morgan Stanley analysts expressed optimism about Meta’s robotics efforts, seeing potential in the company’s growing AI capabilities, particularly in the realms of wearables and robotics. They view the company’s focus on robotics and its push for real-time offline data collection as an important step for Meta’s future development of AI-powered language models and generative AI products.
Despite the drop, Morgan Stanley analyst Brian Nowak maintains a positive outlook on Meta, rating the stock as overweight.
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