With earnings due Aug. 28, Nvidia (NVDA) is about to test its mettle — and a new buy point. Fellow Magnificent Seven stock Meta Platforms (META) has already entered the arena as the social media and artificial intelligence giant continues to tease a new buy point and line of resistance. A breakout from its current base would propel Meta stock to an all-time high.
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Nvidia, Meta Lead Mag 7 Gains Year-To-Date
As of Friday’s close, Nvidia and Meta have far outpaced their Magnificent Seven brethren in terms of year-to-date stock performance. Both stocks have shown more resilience in the face of selling pressure in the market in July, as has Apple (AAPL).
Meta stock was the first to retake its 50-day moving average last month, followed soon after by Apple. Nvidia retook that benchmark on Aug. 15.
Meta Platforms continues to build on its sharp climb off the low it hit in November of 2022. From that low until hitting an all-time high in July, the stock soared 514%.
Year-to-date gains for Alphabet (GOOGL), Amazon.com (AMZN), Apple and Microsoft (MSFT) come in under 20%. Microsoft stock has seen its 2024 gains fade to just 11%.
Tesla (TSLA), whose market capitalization now lags that of non-Mag 7 Broadcom (AVGO), is down 11% for the year. The electric vehicle maker is clinging to support at its 10-week line.
| Company | Symbol | YTD gain* | Comp Rating | EPS Rating | RS Rating | SMR Rating |
|---|---|---|---|---|---|---|
| Nvidia | (NVDA) | 161% | 98 | 99 | 98 | A |
| Meta Platforms | (META) | 49 | 94 | 97 | 93 | A |
| Alphabet | (GOOGL) | 19 | 77 | 98 | 64 | A |
| Apple | (AAPL) | 18 | 91 | 86 | 86 | A |
| Amazon.com | (AMZN) | 17 | 82 | 82 | 67 | A |
| Microsoft | (MSFT) | 11 | 65 | 93 | 57 | A |
| Tesla | (TSLA) | -11 | 59 | 57 | 53 | B |
*As of Aug. 23, 2024
AI Drives Meta’s Growth — And Costs
On July 31, Meta Platforms reported second-quarter earnings. The Facebook, Instagram and WhatsApp parent impressed analysts with the strength of its advertising sales. But Wall Street is closely watching the cost of the company’s AI ambitions.
While earnings slowed from the triple-digit gains in the second half last year, Meta generated 60% earnings growth to $5.16 per share in Q2. Sales grew 22% year over year to $39.1 billion.
For the full year, analysts forecast a 37% increase in earnings to $21.26 per share, followed by a 13% rise to $24.11 per share in 2025.
The AI aspirations of Meta Chief Executive Mark Zuckerberg do not come cheap. Zuckerberg told analysts that Meta could spend up to $40 billion on capital expenditures in 2024. That would mark a 42% increase compared with last year.
Meta Stock Teases Breakout, Tests Resistance
Nvidia is targeting a 140.76 entry in a cup base with as it gets ready to report what one analysts calls “the most important tech earnings in years.” Meanwhile, Meta stock continues to contend with a line of resistance around 540.
Meta has built a third-stage consolidation after finding support at its 40-week line and retaking its 10-week moving average. The buy point for Meta stock is 542.81. After rising early Thursday, Meta again bumped into resistance and pulled back, closing 2% below the new entry. On Friday, the Facebook parent edgd lower but stayed positive for the week.
Nvidia retreated Thursday but rose over 4% on Friday. It may be forming a handle to offer an earlier entry with earnings on tap.
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