Buyable Gap Up - META, MSFT

Published:

8 May 2025 03:50 ET

Both META and MSFT had buyable gap ups on strong earnings reports. Both are still within buying range.

Meta (META): Strong Q1 2025 Earnings and AI Momentum

Financial Highlights:
- Revenue rose 16% year-over-year to $42.3 billion.
- Net income jumped 35% to $16.6 billion, with EPS up 37%.
- Operating margin expanded to 41%.
AI and Business Growth:
- Meta’s continued expansion in AI offerings (like Meta AI and AI glasses) and nearly 1 billion monthly active users for Meta AI are driving user engagement and advertising revenue.
- Investments in AI-powered ad targeting and content recommendations are making Meta more resilient to macroeconomic headwinds, outpacing smaller competitors.
Market Reaction:
- Shares rose nearly 3% after earnings, with analysts raising price targets and reaffirming Meta’s strong position in digital advertising and AI.

Microsoft (MSFT): Cloud and AI Drive a Breakout Quarter

Financial Highlights:
- Revenue reached $70.1 billion, up 13% year-over-year and above expectations.
- Earnings per share were $3.46, beating forecasts by 7% and up 17% YoY.
Cloud and AI Acceleration:
- Cloud spending surged 33%, with 16% of that growth attributed to increased investment in AI infrastructure.
- Microsoft’s strong results erased previous stock losses and led to a more than 10% jump in share price.
Analyst Response:
- Analysts raised price targets, signaling confidence in Microsoft’s continued leadership in cloud and AI.

Why These Gap Ups Are “Buyable”

Both stocks gapped up from strong bases on high volume after clear earnings beats-a classic “breakaway gap” pattern that technical traders look for as a bullish signal.
The moves were confirmed by strong fundamentals: robust revenue, profit growth, and clear leadership in AI and digital infrastructure.
For investors, such gap ups are often considered actionable entry points, especially when supported by volume and a solid business narrative.

In summary:
META and MSFT's buyable gap ups reflect investor enthusiasm for their strong earnings, leadership in AI, and resilient business models. Both companies are benefiting from their scale, data, and ongoing innovation in artificial intelligence, making them standouts along with NVDA in the current tech rally.

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