Anyone waiting for a pullback in Meta Platforms (NASDAQ:) stock should cheer the Q1 results. The news underscores the company’s strengths yet resulted in a 15% correction in the share price. Analysts are adjusting their targets but continue seeing substantial upside, leading the market to new heights. Weak guidance or not, Meta is looking ahead to a solid year and will likely outperform its targets.

Marketbeat.com is tracking more than a dozen analysts’ revisions that suggest a 20% to 50% upside from the post-release price point. Most revisions are lower but range from slightly below the consensus to well above it. Several revisions are higher and also align with a consensus-or-higher outlook for share prices. The takeaway is that the consensus target, up 135% in twelve months, aligns with the all-time high share price and continues to rise. The price action in Meta may be volatile over the next few weeks or months, but a bottom for the market is close, and a rebound is on the way.

Meta Platforms Builds Leverage in Q1

Meta Platforms had a solid quarter in Q1, producing revenue of $36.46 billion. The 27.3% YOY growth outpaced the Marketbeat.com analyst’s consensus forecast by 660 basis points on increased users, ad delivery, and revenue per ad. DAP increased by 7% across the enterprise, with ads served up 20% and revenue per ad up 6%.

Margin is another area of strength. The lead into efficiency and leverage gained with revenue growth shaved 1300 basis points off the operating margin. Because of this, the bottom line results grew by 115%, leaving GAAP earnings at $4.71 and the company in robust financial conditions.

Guidance, specifically the increase to CAPEX, is why the market for Meta stock reset. The company issued guidance for Q2 that aligns with the analysts’ consensus forecast but with the midpoint below it. That was compounded by a 12% increase in planned spending as the lean into AI infrastructure ramps. The problem for the market is that AI costs more than expected and isn’t delivering the secretly hoped-for strength. However, guidance is still strong, with revenue forecast up 20% YOY in Q2 and a positive long-term outlook.

Meta Platforms Increases CAPEX, Analysts Defend the Move

The chatter on Wall Street is bullish. The takeaway is that the momentum move in Meta stock is likely over, but the next growth phase lies ahead. AI has already benefited results and should continue to add momentum as technology advances. AI is also seen to aid Meta’s moat, increasing its differentiation from other social media companies and ensuring its long-term dominance. Analysts also point to past investment cycles, which have produced robust returns for investors. The stock is down 15% today but up 300% from recent lows and 1000% over the last ten years.

The technical outlook for Meta stock is robust. Earlier this year, the break to new highs signaled an inflection in the market that could lead to the $665 region or higher over the next twelve to eighteen months. The swing from the low to the break-out point is worth $287 or 311%, providing projects for future price movement.

The critical time for Meta stock is now. The market is correcting after a substantial rally and may fall further before rebounding. The critical support target is the previous high, near $380, which may be reached soon. A rebound will likely follow if the market confirms support at this level. If not, Meta stock could crash through support and fall back into its prior trading range. Because the analysts support the market, that is not expected. The more likely scenario is that Meta will consolidate at or near current levels until more news is available later in the year.

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