Shares of Meta Platforms (META) have lagged several other members of the so-called Magnificent Seven in recent months, even as the broader technology sector and artificial intelligence trade continued to rally.
While stocks such as Nvidia and Microsoft have returned to or surpassed record highs, Meta shares remain below their previous peak after a volatile start to 2026.
Still, some analysts believe the recent stabilization in the stock could lay the groundwork for a stronger recovery during the second half of the year.
Meta stock was trading near $606 on Thursday and remains down less than 10% for the year after recovering from a steeper decline earlier in 2026.
Technical signals suggest stabilization
Technical analysts have pointed to several chart patterns that may indicate selling pressure is beginning to fade.
According to analysis from Barron’s Investor Circle senior technical analyst Doug Busch, Meta has underperformed the Roundhill Magnificent Seven ETF over the past year, with candlestick formations repeatedly signaling important turning points throughout the stock’s trend.
A bullish harami cross that formed on March 30 suggested potential exhaustion after prolonged weakness, while prior doji candles near the $800 level and again in late January preceded reversals lower.
Busch noted that the current consolidation near $600 resembles a bear flag pattern, with possible downside risk toward the $575 to $580 area to fill an early April price gap.
At the same time, the longer-term setup may still support a move back toward the $800 level by year-end if support levels continue to hold.
On the weekly chart, Meta appears to be forming a potential double-bottom pattern dating back to late summer 2025.
A bullish “three white soldiers” formation also emerged after the stock rebounded from the $500 area in April.
“Weekly chart completed bullish three white soldiers formation and bears unable to push this lower in meaningful way,” Busch said.
Recent doji and spinning top candles have also suggested that downside momentum may be weakening.
AI spending pressures weigh on sentiment
Meta’s volatility this year has largely been tied to growing investor concerns surrounding artificial intelligence spending and rising capital expenditures.
The stock initially surged following a strong fourth-quarter 2025 earnings report, but later came under pressure amid broader market weakness tied to AI spending fears, legal challenges, and geopolitical tensions linked to the US-Iran conflict.
Shares also dropped 8.6% after the company’s first-quarter 2026 earnings release.
Meta has attempted to address concerns around rising AI costs by reducing headcount while redirecting more resources toward AI-related initiatives.
Reports emerged in May that the company planned to lay off roughly 8,000 employees, representing about 10% of its workforce.
Unlike Meta’s earlier “Year of Efficiency” layoffs between 2022 and 2023, the latest cuts come despite strong business performance.
Meta recently reported revenue growth of 33% year over year, its fastest pace in several years.
However, investors appear unconvinced that layoffs alone will materially offset Meta’s aggressive AI spending plans.
Morgan Stanley analysts estimated that a 20% workforce reduction could generate annual savings between $3 billion and $7 billion.
At the current scale of layoffs, projected savings would likely be significantly smaller relative to Meta’s estimated 2026 capital expenditure guidance midpoint of $135 billion.
Growth remains central to Meta’s AI strategy
Investors increasingly appear focused on whether Meta can generate enough long-term revenue growth to justify its expanding AI investments.
In addition to layoffs, Meta is reportedly reassigning around 7,000 employees into AI-focused roles as it prioritizes artificial intelligence development across the company.
The strategy reflects a broader shift toward integrating AI deeper into Meta’s products and infrastructure rather than relying solely on cost reductions to improve profitability.
While uncertainty surrounding AI spending remains a key overhang for the stock, analysts continue to monitor whether Meta’s operational growth and improving technical setup can support a broader recovery later this year.
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