Is Meta Stock a Buy After Major Apple AI Coup?

If anyone has been aggressive in chasing the future promise of AI technology, it has been Meta Platforms META and the firm's sometimes villainized, sometimes celebrated CEO Mark Zuckerberg. 

One thing is certain: when Zuckerberg focuses on something, anything, he really gets after it. The news that broke overnight is just one more example.

According to Bloomberg News, Ruoming Pang, now the former head of AI modeling at Apple AAPL, is leaving that firm to take a position at Meta Platforms. Pang's hiring is just the latest in a series of higher-profile AI-related moves made by Zuckerberg, who is building out Meta's brand-new AI super intelligence division.

Just recently, Meta had recruited four AI researchers away from OpenAI. That news followed two other hires that were drawn from OpenAI's Zurich office. The firm has also hired researchers away from both Anthropic and Alphabet's GOOGL Google division.

Bonus Babies

Reuters, among others, reported in mid-June that OpenAI CEO Sam Altman had claimed that Meta Platforms had offered his high-end AI-focused employees signing bonuses of up to $100 million as part of a recruitment strategy. That came after Meta had invested $14.3 billion in data-labelling startup Scale AI and hired that firm's leader, Alexandr Wang. Meta's CTO has since refuted claims about the size of these bonuses that Meta Platforms has supposedly been throwing around. That said, Meta "is definitely offering hefty multimillion-dollar pay packages to AI researchers" according to TechCrunch.

Earnings

Meta Platforms is expected to release the firm's second quarter financial results in about three weeks. Currently, Wall Street is looking for a GAAP EPS of $5.86 on revenue of roughly $44.5 billion. This would compare well to the year-ago comp of $5.16 on revenue growth of more than 14%. While 14% is not bad at all, this would continue a deceleration in revenue growth that Meta Platforms has experienced since early 2024.

Of the 40 sell-side analysts that I can find that cover META, 20 have revised their earnings estimates for the quarter higher, while 20 have lowered their earnings estimates. Hmm. An even split. What does the chart say?

The Good and The Bad​

Nice setup, right? Readers will see a double-bottom pattern of bullish reversal that worked like a charm ​and ultimately morphed into a cup-with-handle pattern with a $710 pivot. That pivot has already provided support on at least one attempted sell-off. This pattern and pivot could provide for a target price in the $780s.

Now, not everything's coming up with butterflies and roses on this chart. While relative strength is solid but not technically overbought, the stock's daily MACD is a bit sloppy. While the histogram of the nine-day EMA has moved into negative territory, the 12-day EMA has moved below the 26-day EMA. That could be a short-term bearish signal. Oh, and then there's this:

What if we are really looking at a giant double-top pattern of bearish reversal. ​For that reason, I cannot engage with this name on the long side until either the 50- or 200-day SMAs are tested and pass that test or the last sale exceeds the apex of the second peak at $748. For now, this name is a trade, not an investment.

At the time of publication, Guilfoyle had no positions in any securities mentioned.