Chip stocks fall with Nvidia after data center rev disappointment
On Wednesday, Cantor Fitzgerald analyst Deepak Mathivanan revised the price target for Meta Platforms Inc. (NASDAQ: NASDAQ:META), decreasing it to $624 from the previous target of $790, while maintaining an Overweight rating on the company’s shares. The revision comes as Meta’s stock has experienced a significant 11% decline over the past week, though InvestingPro data shows the company maintains impressive gross profit margins of 82% and strong revenue growth of 22% over the last twelve months. Mathivanan predicts that Meta’s first-quarter 2025 earnings will likely align with the higher end of the company’s previous guidance, attributing this to a slight slowdown in March being counteracted by favorable foreign exchange rates. However, the second-quarter guidance is expected to present a broader range and may not meet the consensus at the higher end, which is projected to be $44.4 billion or a 14% year-over-year growth.
The forecast shortfall is primarily attributed to the company’s exposure to tariffs. The analyst also anticipates that Meta will provide insights into the trends of April and reiterate its operational expenses and capital expenditures for the full year 2025 during the earnings report. Cantor Fitzgerald’s current projections include a total revenue growth of 9% for the second quarter and 7% year-over-year for the second half of 2025. These predictions consider the effects of tariffs, a general economic slowdown, and reduced advertising from China-based companies. According to InvestingPro’s analysis, Meta currently maintains a "GREAT" financial health score, with robust cash flows and strong balance sheet metrics. Get access to 12+ additional exclusive ProTips and comprehensive financial analysis through InvestingPro’s detailed research reports.
Meta’s stock performance has lagged behind that of other mega-cap companies over the past 30 days, a trend attributed to concerns over tariffs. The stock may continue to face pressure if the economic environment deteriorates. Despite these challenges, Mathivanan highlights several unique factors that could benefit Meta, such as the effectiveness of its advertising leading to market share gains, the potential of MetaAI, and the opportunities for monetization through business agents.
In light of these considerations, Cantor Fitzgerald reaffirms its Overweight rating on Meta Platforms Inc., with the revised price target now standing at $624, reduced from the previous estimate of $790.
In other recent news, Meta Platforms has been navigating a complex landscape with various developments impacting its performance. BofA Securities maintained a Buy rating on Meta Platforms, setting a price target of $640, despite ongoing legal proceedings that could affect the company’s future. Analyst Justin Post from BofA highlighted the trial’s potential conclusion by July 2025, with final resolutions possibly extending to 2027. Meanwhile, the FTC Chair labeled Meta as a ’monopoly’ amidst a rise in deal activity, emphasizing the company’s significant influence in the tech sector. Mizuho (NYSE:MFG) analysts pointed out reduced ad spending by Chinese advertisers, attributing it to the ongoing tariff war, while also noting competitive pressures from companies like OpenAI. Additionally, Meta experienced a slight increase in stock value, alongside other Magnificent Seven stocks, following President Trump’s tariff exemptions on popular electronics. Despite these challenges, Meta’s multi-app structure is considered likely to remain intact, according to BofA’s analysis. Investors continue to monitor these developments closely, as they present both challenges and opportunities for Meta Platforms.
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