Meta Platforms Inc. (Meta (META)) lost about 9% of its value on Thursday after reporting first-quarter earnings. That kind of single-session collapse is rare—it's only happened 11 times before in the stock's nearly 15-year trading history. Thursday makes it 12.
The funny thing is, the earnings themselves were great. Revenue jumped 33% year over year to $56.31 billion, the fastest growth since 2021. Adjusted earnings came in at $7.31 a share, beating the $6.79 analysts expected. Ad impressions grew 19%, and ad pricing grew 12%. The business is firing on all cylinders.
So what broke the stock? Meta said it plans to spend even more money in 2026 than it previously planned. That's it. The market hates uncertainty about spending, especially when it's on AI infrastructure that may not pay off for years.
Wall Street Reacts
Analysts were quick to adjust their views. JPMorgan's Doug Anmuth downgraded Meta from Overweight to Neutral and cut his price target from $825 to $725, citing a "more challenging path to returns on heavy AI capex beyond advertising." Goldman Sachs' Eric Sheridan trimmed his 12-month price target from $840 to $830.
The trigger was Meta raising its 2026 capital expenditure guidance to $125-$145 billion, up from $115-$135 billion set in January. That's the second consecutive upward revision. Wall Street was almost unanimous in its disappointment.
The question on everyone's mind: Is this the dip to buy?
What History Says About 9%+ Meta Selloffs
Drops of this magnitude are rare. According to TradingView's "Event Study: Forward Return Analyzer" indicator, only 12 sessions since Meta's 2012 IPO have produced a one-day decline of 9% or more. Thursday's print marks the 13th. The forward-return profile of those 12 prior episodes is striking, especially on longer horizons.
Here's the data:
| Date | 1-Day Move % | 1M % | 3M % | 6M % | 12M % |
|---|
| 2012-05-21 | -10.99 | -6.44 | -43.73 | -28.53 | -24.60 |
| 2012-05-29 | -9.62 | +8.74 | -32.94 | -8.60 | -16.44 |
| 2012-07-27 | -11.70 | -19.22 | -10.95 | +36.97 | +49.46 |
| 2012-09-24 | -9.06 | +11.74 | +29.53 | +20.88 | +133.04 |
| 2018-07-26 | -18.96 | +0.68 | -17.53 | -16.33 | +13.33 |
| 2020-03-12 | -9.26 | +13.15 | +47.98 | +72.30 | +73.76 |
| 2020-03-16 | -14.25 | +20.71 | +61.39 | +80.48 | +91.27 |
| 2022-02-03 | -26.39 | -14.63 | -10.82 | -29.00 | -21.55 |
| 2022-09-13 | -9.37 | -14.92 | -21.54 | +18.13 | +99.22 |
| 2022-10-27 | -24.56 | +11.07 | +54.93 | +143.58 | +202.97 |
| 2024-04-25 | -10.56 | +8.73 | +2.73 | +29.88 | +23.99 |
| 2025-10-30 | -11.33 | -2.78 | +0.34 | +0.73 | — |
| 2026-04-30 ◄ | -9.19 | — | — | — | — |
| AVERAGE | — | +1.40 | +4.95 | +26.71 | +56.77 |
| MEDIAN | — | +4.71 | -5.24 | +19.51 | +49.46 |
| WIN RATE | — | 58.33% | 50.00% | 66.67% | 72.73% |
| SHARPE | — | 0.11 | 0.15 | 0.55 | 0.83 |
The pattern is uncomfortable in the near term and powerful in the long term. One month after a 9% drop, Meta has posted an average small gain of 1.4%, but the median is negative. Three months after, the average return is about 5%, but the median is -5.24%. That means more than half of these episodes were still in the red a quarter later.
The pain rarely ends on day one. That's a reminder for dip buyers: if you want to enter here, history says you should have the stomach to absorb more pain before the trade works.
Stretch the window to six and twelve months, and the story flips. The average 6-month return reaches 26.71% with a 67% win rate. Twelve months out, 73% of cases were positive and the average forward return tops 57%. The Sharpe ratio at 12 months reaches 0.83, signaling that buying these dislocations historically produced returns disproportionate to the risk taken.
Two Episodes That Define the Trade
Two cases anchor the extremes.
February 3, 2022: Meta plunged 26.39% after Q4 2021 results, the largest single-day market cap loss in U.S. corporate history at the time. Rising capex, decaying ad attribution from Apple's privacy changes, and the first declining DAU print in company history. Buying that day was punished. The stock fell another 14.63% over the next month and was still down 21.55% twelve months later.
October 27, 2022: Meta plunged 24.56% after Q3 2022 results, capex guidance again the trigger. Revenue had turned negative year over year. Zuckerberg's metaverse spending was openly mocked. The stock bottomed near $88 the following week. Twelve months later that same buy was up 202.97%. Six months later, up 143.58%.
Both episodes featured capex shock as the proximate cause. One was the start of a year-long bear market. The other was the bottom of one. The difference was not visible in the headline.
What This Means for Investors
The historical base rate is unambiguous. Twelve prior 9% drops have produced an average 12-month gain of 57% and a 73% win rate. Even the one-month forward window is positive on average, an unusual finding for a panic selloff. That is the bull case in one paragraph.
The dispersion is the catch. The worst observed 12-month outcome (Feb 2022) was -21.5%. The best (Oct 2022) was +203%. Same headline. Opposite outcome. The difference came down to whether the capex shock was absorbed by an accelerating or a decelerating franchise.
The debate now is whether Thursday is the next October 27, 2022—a generational capitulation low—or the next February 3, 2022, where the capex shock marked the start of the drawdown rather than its end. History favors the buyer with a 12-month horizon. The setup demands it.
Image: Shutterstock
