Meta Platforms (META) has seen a notable decline of 14.5% since its last write-up, with the stock currently trading at $643 after peaking at $762. The company's Q3 earnings report revealed a 26% revenue increase to $64.6 billion, surpassing analyst expectations, but a significant drop in operating income by 37% to $13 billion due to a $9.89 billion legal settlement has raised concerns.
Additionally, META reported its first quarter of negative free cash flow since 2012, which could impact investor confidence. The stock's technical setup appears broken, with crucial resistance at $664 and a risk of falling below the $626 level, which could signal further declines.
In contrast, Cloudflare (NET) has demonstrated resilience, returning 0.7% since its last mention, and currently trading at $326. Despite a recent 19% drop, the stock has maintained an upward trend with higher lows and higher highs since spring.
The upcoming Q3 earnings report on November 5 will be critical for validating its high valuation, currently trading at approximately 260 times its non-GAAP EPS guidance. Investors are advised to watch the $285 level closely, as a close below this could break the sequence of higher lows that supports the uptrend