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Investors Turning Bearish on META
 

Shares of META (META) are trading lower on Thursday following the companies earnings report.

Meta Platforms delivered another strong quarter, but traders are focusing on what comes next, not what’s in the rearview. Despite beating expectations across the board, rising capital expenditures and cautious guidance triggered a sharp sentiment shift.

Shares of META Remain Fundamentally Sound
 

Meta beat by $0.53 per share with Q3 revenue of $51.2 billion, up 26% year over year.

Advertising drove $50.1 billion of that total, boosted by AI-powered recommendations and heavy engagement on Reels and Instagram.

Daily active users reached 3.5 billion across Meta’s family of apps, with Instagram hitting 3 billion monthly users and Threads surpassing 150 million daily users.

Reality Labs revenue climbed 74% to $470 million on strong Quest headset and AI-glasses sales.

Operating income reached $20.5 billion with a 40% margin. Free cash flow hit $10.6 billion, and Meta closed the quarter with $44.4 billion in cash and marketable securities.

The concern for investors isn’t the numbers, it’s the trajectory.

Meta spent $19.4 billion on CapEx this quarter and signaled that spending will increase further in 2026 as it expands AI infrastructure and talent.

Management maintained in-line Q4 revenue guidance, signaling discipline, but traders immediately recalled Zuckerberg’s 2022 over-spending cycle that erased 75% of Meta’s market value.

Sentiment Shift: Traders and Investors Turning Bearish
 

The stock dropped more than 7% in after-hours trading as investors sold the “buy the rumor” gains.

The reaction wasn’t about performance, it was fear of another CapEx-driven drawdown.

Large-cap tech peers are also ramping AI investment, but Meta’s aggressive spending plan reignites memories of the 2022 collapse, when the company overbuilt into weakness.

Short-term sentiment now skews bearish as traders price in margin pressure and higher long-term costs.

The market wants proof that Meta’s AI pivot can deliver monetization before burning more cash on infrastructure. Until then, sellers control the near-term tape.

Technical View: $700 Defines the Next Move
 

Meta hit all-time highs near $800 in August before the 50-day moving average rolled over two weeks ago.

A brief “buy the rumor” rally pushed shares back above that trendline ahead of earnings, but the post-report reaction reverses that move.

$700 is the key level for the moment. It’s both a round-number psychological floor and short-term technical support.
 

A break below $700 targets the 200-day moving average near $675, and if momentum accelerates, $600 becomes the next likely test, also aligning with Meta’s 20-month moving average.

A bounce from that $600 price would likely form a short-term “dead-cat” rally.

A close below it confirms a structural trend shift and opens the door to a deeper correction, possibly dragging other high-beta tech names lower.
 

Outlook
 

Meta remains a trader’s stock in this environment.

Fundamentals are intact, but the sentiment and technical setup now favor short-term weakness.

The $700–$600 range will define the next major move, and traders should expect volatility to rise as the market digests Meta’s renewed spending spree.

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