2 Reasons Meta Stock Broke Its Winning Streak: Should You Still Invest?
Written by
John Csiszar
Edited by
Zuri Anderson
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Meta Platforms, formerly known as Facebook, has been a volatile stock over the years, and it still sports a beta of 1.20, according to Yahoo Finance. This means that on average, the stock is 20% more volatile than the overall market. But usually, volatility means a stock moves up and down. This has not been the case recently with Meta’s stock, which posted an incredible run of 20 straight trading days in the green.
But as an investor, is it a good time to buy at stock after it has gone straight up? Is it worse after it breaks that streak? And what about Meta in particular makes it a good or bad investment? Read on to learn more.
How Much Did Meta Gain During Its Run?
Meta Platforms closed at $611.30 per share on Jan. 16. Its 20-day rally pushed it up every single trading day through Feb. 14, when it closed at $736.67. Over those roughly four weeks, the stock gained 20.5%.
What Does It Mean That Meta Broke Its Streak?
On Feb. 18, Meta closed at $716.37, a loss of 2.75%. But that was just the beginning of the profit-taking. The stock continued to decline for numerous sessions in the following week, closing at $658.24 on Feb. 27. That closing price marked a 10.6% decline from the stock’s Feb. 14 peak. However, it still remained about 7.7% above its Jan. 16 close, when it began its record streak.
Should You Buy Stocks That Keep Going Up?
The decision on when to sell a stock is one of the most difficult for investors to make. On the one hand, momentum tends to breed momentum. When stocks go up, investors fearful of missing out on gains tend to jump in. This can continue to push a stock’s price higher, even beyond what may seem to be rational levels. This is part of the reason why Meta was able to gain for 20 days in a row.
But trees don’t grow straight to the sky, and no stock goes up every single day in perpetuity. Even Meta gave back more than half of its gains in the ensuing few trading sessions, as the stock’s short-term trend reversed course and investors began taking profits.
Now That Meta Has Sold Off, Is It Time To Buy?
One of the paths to long-term riches in the stock market is to “buy low and sell high.” In other words, if you’re a long-term believer in Meta, buying it after its recent 10% decline gives you a better entry point than when it peaked on Feb. 14. And the same factors that drove Meta on its multi-week rally still remain.
In addition to Meta CEO Mark Zuckerberg cozying up with the current presidential administration, the stock rallied in large part due to Meta’s aggressive investment into AI infrastructure – $65 billion in 2025 alone, to be exact. With AI being the buzzword dominating all technology these days, this seems like a prudent bet going forward. Coupled with the company topping Wall Street’s earning expectations in its most recent quarter and Meta still seems to have the wind at its back.
What Do Analysts Say About Buying Meta?
Wall Street analysts tend to have 12-month price targets, meaning they look a bit longer term than a 20-day trading session. Ultimately, earnings drive stock prices, and part of the job of being a good analyst is to sort through any short-term noise or market movements to project company earnings and growth rates over the intermediate-to-long term.
According to Business Insider, analysts remain firmly bullish on shares of Meta. They hold a consensus “strong buy” rating on the stock, with 44 out of 48 analysts following the company holding a “buy” rating. The average 12-month price target among these analysts is $764.61. That suggests a gain of about 16% from current levels.
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