META Stock CRASH!!! | Buy The Dip In META Stock????

First quarter numbers are available for

meta

platforms and shares are falling in the hours after. Let's go over the revenue, the earnings, the most important guidance for the second quarter, how it matches the expectations that Wall Street had for the targets, what does this mean for the third quarter? for next year for goal, why are

stock

s falling as we review these financial statements? The operating income cash flows from operations, the dividend payments now of

meta

, all look absolutely fantastic, but going forward we're seeing the

stock

of meta, at least at the current time, go down. 11% now, can Mark Zuckerberg get on the conference call and turn things around or will he open the day tomorrow with big losses?

We will talk about some of the areas we are moderating if these losses continue. Is this a great opportunity? to buy or add to a meta platforms position what's going on investors hope you're doing well out there big tech gains are coming your way and not much bigger than meta platforms $1.22 trillion helped by the fact that meta stocks are up over 131% over the last year, including year-to-date, up over 39%, the stock has just been on an absolute tear now that those first quarter numbers have come in. Incoming revenue will call that $36.5 billion, it's actually $36.467853 here at one point exceeded those expectations. on the higher side, which were inflated because the meta had great guidance in the previous quarter which was 27.3% growth year over year and you are not looking at a stock that is wildly overvalued 24 times ahead of PE and you are growing . at 27%, Wall Street expectations were at 36, the top end was towards 37, so maybe there's some disappointment on the earnings side that we'll get to now.

I think we would be remiss on this day when Meta reports its first quarter earnings. a bill on the president's desk and he signed it that mandates a ban on Tik Tock or a divestment from the Chinese government, they are going to take this to court and the irony is incredibly dumb guys because the Chinese government is going to defend First Amendment rights for Tik Tok does not have any First Amendment rights in the great country of China but they will come to our country with their own product and their own business and argue that and at the same time the Chinese government bans sites like goal.

It prohibits sites like Google prohibits other types of things, so I tell you that I don't have a big problem with this. I don't think Joe Biden has any interest in overthrowing this and the next president if he's potentially former President Donald Trump, he's not. let's override this what is so what this means broadly is look at if Tik Tok gets banned and goes away that's incredibly optimistic for everyone here in the United States not just for meta but for YouTube Snapchat for almost everyone , but what it could also mean. It's that eventually we could have a bidding process for Tik Tok, they could go public, they could find a contortion of investors.

I don't think we'll see one of these big tech companies being able to buy this, obviously Google or Apple. There are several different companies, Microsoft, that would love to step up and write a check for Tik Tok. It's just not going to happen from a regulatory perspective, not under President Biden, not under former President Trump, it's just not going to happen, but what we could have. Tik Tock is getting an improved valuation and then people look here on meta and say well this is trading 24 times forward and maybe you can apply this to Pinterest and Snapchat on the other ones if you get a Tik bidding process?

In my opinion, Tok will probably lift the entire social media ecosystem in terms of valuation, not necessarily over the next month or two, but as the major cases develop and all that important guidance for the second quarter coming from meta 36 .5 to $39. billion men, it's an incredibly good second quarter, but Wall Street already had those expectations in place. The midpoint of analyst estimates was fourth. I'm going to zoom in on this so you can see this, you have to put your glasses on at $38.3 billion at the top. The final estimate was close to 39, let's say meta sandbag at one point because they really raised their guidance last quarter and got over 40 million, so they probably have an opportunity to generate $40 billion in revenue that's still available . just slightly above where expectations already were now you start looking for the third quarter, probably a 3940 billion quarter, you start looking for the fourth quarter, there's your advantage: it's only 10% better than a normal quarter or with the disruption around Tik Tok maybe the election and all that stuff happening in the fourth quarter of this year, could you have a positive surprise for the meta that would be positive at least from a revenue perspective?

Now other things here were interesting and don't just apply to the meta if you're on the chip. space if you are in Taiwan semi if you are in asml if you are in any of the data centers out there I think this information was relatively optimistic, they say the full year expenses are 96 to 99 billion, the previous outlook was from 94 to 99 so they are tightening it up a little bit, they definitely raised it on the low end from 94 to 96 so expect higher spending on meta which will reduce profits and I think that's one of the reasons by which I mean this continues to sink in the hours after, now it's more optimistic for the data centers, the nvidias, the AMDs, the tsms, maybe even Intel and all the others, the supermicros, all the semiconductors that make up part of this AI. data center construction, well, there you have it, we anticipate that our capital expenditures for the full year 2024 will be between 35 and 40 billion, which is an increase from 30 to 37, which is a big jump, so which at the lower end increased it by 5 billion from 30 billion. up to 35 at the high end, they are looking at 37 up to 40 as they continue to accelerate their infrastructure investment to support our AI roadmap and are not providing guidance for 2024 in terms of capital expenditure, but believe this will increase next year , so you're going to go from 35 to 40 billion this year maybe 40 45 next year we already know Google and Microsoft are doing about 50 this year I guess they'll probably do at least that and then when you come here and look at the quote from Mark Zuckerberg right at the top of the press release, they say that our new version of meta AI with flame 3 is another step towards building the world's leading AI, so they stopped talking about those stylish ski goggles and the metaverse now.

We're talking about Ai and obviously meta has kind of an open source approach in the sense that they don't have this kind of $20 a month AI or Gemini open service, so Meta is taking a little bit of a different approach. , the expenses will not cover. it will be offset by any incremental revenue at least in the short term and we will see if that approach is worth it for the meta and again the reward will be that in the following quarters you will have an increase in that revenue and eventually maybe a new product from the meta as well.

Now I tell you what, guys, $36.5 billion in revenue last year, you were at $28.7 billion, now last year you were, you know, 131% down on the stock and what it's really like impressive from this company. In the press release they also noted that they reduced headcount by about 10% year over year, so they actually reduced headcount and were still able to increase revenue year over year by over 27% and then we're guiding by 19 20% growth for the next quarter. I guess the average team's growth after that, but look their R&D went up a little bit, not a lot. Marketing sales are not much, in fact, their market sales actually dropped from 3 billion to 2.6 billion.

So they increased their revenue but didn't have to spend more on marketing sales, they spent a little more on general administration. You see your total cost from 21.4 billion to 22.6 billion, so you take this 36 and subtract 22.6 and get boom $1.138 billion of positive operating income last year was only 7.3 billion net income paints the same story 5.7 billion last year up to 12.4 billion now Wall Street knew this was coming Wall Street priced it in, which is why it has had stocks on a monster rally and sometimes it's a selling news, but the kind of rumor and I tell you what meta delivered, but now it's about what's next, what's next for meta, what's next for AI, how these investments will play out in reality.

The labs that I'll show you in a minute haven't paid off at all and we'll see if AI pays off, since they're now spending billions of dollars on it from a bottom line perspective, there's absolutely nothing to worry about, people, we have 5758 billion. Straight Cash takes me home, as Randy Moss would say, and we have long-term debt of about $18 billion total, it has total liabilities of $73 billion, it almost balances it on cash alone, it certainly balances it on its total current assets let alone all of your assets from a balance sheet perspective, that's Mega Cap technology for you right now, your net income comes down to our cash flows from operating activities and we can add things back in like compensation based on shares, depreciation, amortization, your accounts. the payable is returned and you get your net cash as long as your operating activities look at these guys up to 1 19.3 billion, meaning in just three months this company is producing almost 20 billion operating cash flow the year last, you were closer to 14 and we talked about everyone. these expenses, look, we talk about how they are investing in infrastructure, they have staff, obviously, they still have to pay taxes, but look, if you buy a property, the plant equipment was 6.4 billion last year it was 6 .8, so this also supports the thesis when we did it. our TSM video was last week or the week before, the CEO of TSM said, hey, the second half of the year is looking good, we also did a video on asml which makes the lithography equipment that makes a lot of these cutting edge chips , they also said the second half of the year looks better and this is where you're seeing it, in the most recent quarter, you're actually down year over year on capital expenditures, but it's next quarter and the next quarter is when we're going to see the acceleration there that is also being discounted by Wall Street.

They expect $20 billion of target operating cash flow next quarter based on the revenue estimates we got, but the acceleration will come in real estate and while the team is good news for the semiconductor industry, it means those sales are coming, it doesn't mean it's not already included in the stock price and you'll run out and buy more semi-shares, but it just means those orders are coming now. what you do with all this cash flow, you have 1 19 billion, you only spend about 8.7 on investing activities, well, you're buying back the shares and you bought back over $15 billion. I tell you what you should have waited until the stock fell after earnings these companies are great at building products great at customer service they are terrible at choosing where their stock is at the top or bottom they tell you what to buy back of $15 billion in a quarter that is large they also gave a dividend payment Congratulations applauding Standing ovation to the goal for having a dividend.

I think other companies, Google, should do this too. They had about $1.3 billion in payouts there and this is a dividend growth story because they only paid out 1.3 billion in the quarter out of 19 billion in positive cash flow. I tell you what it is a dividend that is going to grow and grow very very quickly now we love to beat the meta, I mean look we just got excited about it, it was like I was writing a love letter there, I tell you what If reality labs grew a million dollars in terms of revenue, they went from 339 to I'm not sorry, over a million dollars, a hundred million, so there was actually positive growth on the reality lab site, But that's what I don't want to say. that's optimistic for the company, but this is the first time I've seen this reality lab segment generating positive revenue growth and still losing money, although here's your 39, you lost 4 million last year, you lost almost 4 million this year and So that just gives you some context, if this company wasn't investing so much in R Labs and maybe they had gone into artificial intelligence or something when they entered this metaverse, well, you wouldn't be dusting off $4kmillion per quarter and instead of If you made $1.13.9 billion in positive operating income, you'd be making like 16 or 18, so this stock would actually be higher, so maybe they're doing you a favor in meta because eventually maybe Reality Labs will pay off, maybe it won't, maybe it will work out. in some other product, but they are doing them a favor because those losses are also contributing to the fact that the stock goes down in the hours afterward. come here and look at this from the technical segment.

Those of you who follow our channel, follow our Friday videos, most importantly watch the technical segment, we said there was a gigantic gap on the Meta chart and we were not going to chase this one, we were going to be patient, we were not going to have fomo, that's something amateurs do when you have this big giant Gap on the chart and you made profits like a day away. Now I can understand that the company puts this Gap here letting it run for 3/4 or 3 months, that's not a big deal, but we had this Gap. maybe a superior pattern for me was the meta and here we are, we have a chance.

Would I run out of tomorrow Thursday and run out and buy meta stocks, not a ton, but I wouldn't blame anyone for wanting to intervene in the The numbers are fantastic, yes, we expect at least two or three quarters the numbers will normalize a little as capital expenditures will catch up with some of the revenue growth this company has had. Putting what we would like is this gap now everyone will be looking at the same chart everyone will be seeing the all time highs in September 2021 here at 382, we were also set at around $400 per share before the latest earnings call for the fourth quarter, which shot this up year-over-year up to over $500 per share, so everyone will be waiting for this gap to be filled. .

Would I be waiting for the gap to be filled to the penny on the dollar? Probably not, no. in a company, especially if you are going to hold this for the long term, if you are swing trading in the short term, yes, wait for the chart to give you the signal, but this is such a financially sound company that it is now paying a dividend as well . too and that dividend will have dividend growth, so in the long run you will be rewarded by holding that stock for a long time and you will notice that the dividend grows every year, whenever meta decides to increase the dividend, you will also get the Share Buybacks, which will go a little bit further now that the stock is trading a little bit lower and look, the AI ​​race is just beginning, it's going to be a marathon, it's not going to be a Sprint, it's going to be an absolute meta marathon. positioned I like their open source strategy, it's kind of a thorn in the side of Microsoft and Google.

I don't know if it will necessarily pay off from a revenue perspective, but they are creating world-class language models in meta and you have to believe. at some point they make it at least an add-on product on their popular social media apps or maybe a new product. I love what's happening. If you're patient, pat yourself on the back, you can get this one. at a lower price, a small allocation maybe later this week when this gap starts to fill, but I tell you the momentum is going to be completely out of this stock and I think you're going to have some opportunities here again.

Too greedy because everyone is going to be looking at the same chart. I hope you enjoyed today's video. Obviously we'll be back later this week. We made a lot of tech wins and I look forward to bringing them to you later this week. Thanks for tuning in, good luck with your investments