Meta Platforms is the IBD Stock Of The Day for Tuesday. Meta stock is ascending from its 21-day moving average ahead of a major product conference for the Facebook and Instagram parent company.
Helped by a big rally following the company's Q2 earnings report late in the summer, Meta stock has gained 31% year to date. That puts the social media giant neck-and-neck with AI chipmaker Nvidia and the recently surging shares of Google parent Alphabet for top performance among the Magnificent Seven stocks.
Meta will kick off its annual Connect developers conference on Wednesday at the company's Menlo Park, Calif., headquarters. Chief Executive Mark Zuckerberg will speak at 8 p.m. ET in a keynote speech that will be livestreamed. Analysts are expecting the Facebook founder to launch a new pair of augmented-reality smart glasses, as well as provide updates on Meta's hugely expensive AI push.
On the stock market today, Meta stock rose 1.9% to close at 779, posting its third straight day of gains.
The stock has advanced despite indications that top rival TikTok will stay operational for U.S. users. Trump administration officials said Monday that they have a deal framework with the Chinese government to keep TikTok in the U.S. under restructured ownership. Investors appeared to be expecting such a deal. President Donald Trump has delayed enforcement of the 2024 law banning TikTok under its current ownership three times since taking office in January.
Meta Connect Preview
In previous years, Zuckerberg has used Meta's Connect event to showcase new metaverse-focused product, such as its Quest virtual-reality headset. But with Meta's investing hundreds of billions to develop AI-related products, the event has also served as a platform for updates on the company's large language models and its AI chatbots.
Meta is expected this year to debut new augmented-reality glasses, which the company has dubbed Hypernova. The glasses will feature a small display that can be controlled through hand gestures, according to a CNBC report.
The glasses provide a new spin on the Ray-Ban smart glasses that spawned a surprise hit for the company's metaverse efforts last year. It is also is a step closer to the Orion augmented-reality glasses that Zuckerberg previewed at the company's Connect event last year.
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Zuckerberg said he views smart glasses as a computing platform that could replace many of the tasks currently done on smartphones.
The glasses could also have a role in developing "superintelligence," the AI concept that Meta is pursuing with the help of researchers lured in recent months with huge pay packages from OpenAI and other rivals.
AI-powered glasses are "going to be the main way that we integrate superintelligence into our day-to-day lives," Zuckerberg told analysts on the company's Q2 earnings call in late July.
Investors are still lukewarm overall on Meta's investments in the metaverse. Of more interest to Wall Street is how Meta can use AI to boost engagement and advertising sales on its massive Facebook, Instagram and WhatsApp platforms.
"While the Connect Conference is geared toward hardware and metaverse innovation, we think the event offers Meta a chance to remind investors about its tangible progress on AI product integration, and to articulate a clearer road map for how AI investments will translate into sustainable long-term growth," BofA Securities analyst Justin Post said in a recent client note. Post rates Meta stock a buy.
Meta Stock: 97 Composite Rating
Meanwhile, Meta stock is ahead about 4% this month. Shares broke a down-sloping trendline with a 0.5% gain Friday and 1.2% gain in Monday trading. That pushed Meta stock more firmly above its 21-day exponential moving average.
A shallow consolidation begun in mid-August needs one more week to become a flat base with a 796.25 buy point. IBD's SwingTrader list added a half position in Meta on Monday, as shares moved above several days of tight trade. SwingTrader marked its buy point at 768.98.
Meta stock has an IBD Composite Rating of 97 out a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. Meta stock is on the IBD Tech Leaders list.
That's only the seventh highest in Meta's Internet-Content stock group. The group had performed well overall of late, ranked 12th out of the 197 industry groups IBD tracks based on six-month price performance.
Meta stock has a 21-day average true range (ATR) of 1.97%. The average true range is a metric in IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.
