Formerly known as FAANG stocks, the landscape has changed due to more than name changes in tech titans like Meta Platforms and Alphabet. Along with Amazon, Apple and Netflix, these household names got slammed in last year's bear market, spurring massive layoffs in the tech sector.
In November, Meta Platforms cut 11,000 jobs, or 13% of its workforce. Amazon, Alphabet and Microsoft have all seen sharp reductions. Amazon has just announced plans to cut 9,000 more positions, bringing the e-commerce giant's total reductions to 27,000. Apple has avoided employee cuts up to now, but has laid off "hundreds of contractors", according to the New York Post.
As the impact of these and potentially more layoffs play out, GOOGL and META stock have established new buy points. Meanwhile, NFLX has dropped below its 10-week moving average as AMZN tests that benchmark line.
Alone among former FAANG stocks, Meta Platforms lands a spot on IBD Leaderboard. The table below provides a quick update on where META stock and its peers stand in terms of Composite Rating and demand-related indicators.
Former FAANG Stocks Today
Sorted by Composite Rating, Meta Platforms comes in just behind Netflix with an 87 rating. Amazon has shown less resurgence in that overall score, remaining at a lowly 41.
The Accumulation/Distribution Rating tracks buying and selling by mutual funds and other large investors over the past 13 weeks. META stock tops that indicator of institutional demand, scoring the highest-possible A+. Amazon stock now earns a strong A- as it tries to retake its 10-week line.
The up/down volume ratio covers 50 days of trading, dividing total volume on up days by total volume on down days. A number above 1.0 points to demand.
Meta Platforms and all its peers on this list exceed the 1.0 benchmark.
| Company | Symbol | Composite Rating | Accumulation/Distribution Rating | Up/Down Volume Ratio |
|---|---|---|---|---|
| Apple | AAPL | 90 | A- | 1.8 |
| Netflix | NFLX | 88 | B- | 1.2 |
| Meta Platforms | META | 87 | A+ | 1.2 |
| Alphabet | GOOGL | 75 | B- | 1.3 |
| Amazon | AMZN | 41 | A- | 1.2 |
AI And The Metaverse Driving Facebook's Future
A focus on artificial intelligence and the metaverse play an integral role in the current and future landscape of Meta Platforms. At the Oscars this year, Hollywood took on the metaverse, with some films, such as "Everything Everywhere All At Once," exploring metaverse-type themes such as infinite parallel worlds.
On Meta's website this month, Tom Allison, Head of Facebook, posted an article about Facebook Today And Tomorrow, noting two key takeaways.
First, Facebook has reached a major milestone, reaching 2 billion daily active users — the highest ever. Second, the story also noted the social media giant's focus on AI, messaging, creators and monetization.
Allison noted "a shift the last couple years with people coming to Facebook more to be entertained, discover something new or see what's going on in the world. These new reasons are why we are investing in AI-powered discovery."
The head of Facebook also commented on how AI-powered recommendations can fuel discovery on the social media platform, opening up even greater monetization opportunities.
Wall Street Eyes Growth For Meta Platforms
Meta Platforms released Q4 and 2022 results on Feb. 1, delivering the medicine investors badly needed. The company vowed to make 2023 a "year of efficiency." In the wake of earlier job cuts, Meta announced $40 billion in new share repurchases.
The social network is a turnaround story amid declining earnings and revenue. But after big job cuts, annual earnings estimates have improved. This year, annual profit is expected to rise 12%, with growth accelerating in 2024, up 21%.
While Meta Platforms comes up short on many indicators in IBD Stock Checkup, it maintains passing scores for its annual pretax profit margin (24.7%) and annual return on equity (18.5%). Along with its low debt-to-equity ratio of 8%, these signs of efficiency put it in a good position to benefit from and expand on the ongoing turnaround.
META Stock Teases Buy Zone After Big Gap Up On Earnings
Meta Platforms gapped up to a one-day gain of over 23% after reporting Q4 earnings on Feb. 1. Volume was huge, coming in 375% above normal.
Since then, META stock has held the bulk of that gain, finding support at its 21-day exponential moving average as it formed a first-stage flat base.
The stock cleared the 197.26 buy point on March 16, but quickly slipped back below the entry.
Meta Platforms closed Monday's session just above that entry at 197.81, poking into the buy zone, which ranges from 197.26 to 207.12.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
