Meta shares have been stuck. Here’s why one analyst just got more optimistic
Every weekday, CNBC Investment Club with Jim Cramer hosts a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Monday’s highlights. 1. Stocks are rebounding on Monday, recouping about half of Friday’s losses triggered by President Trump’s surprise threat of a massive tariff hike on China. Over the weekend, Trump softened his stance, writing on Truth Social that “everything will be fine” with trade relations with China. The tech-heavy Nasdaq rose nearly 2%, boosted by OpenAI and Broadcom’s announcement that they will jointly build 10 gigawatts of dedicated AI accelerators, the latest move by the ChatGPT maker to grow its AI infrastructure. Broadcom shares were the best performer of the day, rising more than 10%. Other AI plays followed: Club name Nvidia was up nearly 2.5%, Oracle was up more than 5%, and AMD was up 1.6%. On Monday night’s episode of “Mad Money,” Jim Cramer will interview Broadcom CEO Hock Tan to discuss the details of the Broadcom-OpenAI partnership. 2. Citi placed a 90-day catalyst watch on Meta Platforms, a stock that is “stuck in a range,” according to Jeff Marks, the Club’s portfolio director. While shares gained about 1% on Monday, stock earnings have fallen since a rally in late July. The latest development in the stock is OpenAI’s launch of Sora, an AI-generated video app that is firmly encroaching on the territory of its Facebook and Instagram parents. Analysts at Citi said they expect Sora to make an impact on Meta, but right now they see a lot to like in Meta’s core advertising business. The catalyst calls are based on signs of ad load growth and estimates that Meta is gaining share of ad budgets as new products are launched. Meta is Citi’s top pick with a price target of $915. “Hopefully it will be the catalyst for stocks to rise again in the next quarter,” Marks said. 3. Shares of Palo Alto Networks rose more than 2% after Wall Street firm BTIG upgraded the cybersecurity giant from neutral to buy, citing field checks that bolstered confidence in its growth outlook. BTIG now expects Palo Alto to maintain revenue growth of over 12% in the coming years. The price target of $248 per share suggests an upside of approximately 19% from Friday’s close. Analysts were also encouraged by the company’s acquisition of CyberArk; This acquisition caused Palo Alto’s shares to initially fall by at least 5% for three consecutive sessions. We upgraded our stock rating and became a buyer of Palo Alto in this sale. (Jim Cramer’s Charitable Trust consists of AVGO, NVDA, META, PANW. See here for a full list of stocks.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
