While Tesla bounced 12 per cent despite missing earnings expectations, Meta shares nosedived after beating earnings expectations.
Mark Zuckerberg played a part in the sell-off when he announced higher-than-expected spending plans, but ultimately the lesson is an old one: expectations matter, with stocks poised to reverse when the bad or good news is seemingly reflected in prices (Tesla was down over 40 per cent in 2024 coming into earnings, Meta was up more than 40 per cent).
Still, Meta’s correction pales in comparison to Nvidia, which fell into bear market territory after declining 20 per cent in a sell-off that erased some $400 billion in market capitalisation. Nevertheless, Nvidia is still a $2 trillion company that is up 70 per cent in 2024.
Expect investors to be watching closely when Nvidia reports earnings on May 22nd.
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