Concerns about Meta already priced in, NVIDIA faces tough environment – Jefferies analyst

Jefferies analyst Jared Weisfeld said Friday that “very real concerns” about falling ad spending at Facebook parent Meta Platforms (NASDAQ:META) have already been priced into the stock, which has lost more than half its value so far in 2022.

Speaking to CNBC, the U.S. tech sector specialist at Jefferies gave a more cautious assessment of NVIDIA (NVDA), saying Federal Reserve interest rate hikes will cool overall demand, which will weigh on semiconductor stocks.

“It just makes it a very difficult environment when someone like an NVIDIA is levered so significantly to the cycle,” he said.

On META, Weisfeld argued that at the current stock price, investors could buy the social media giant at “sub-market multiples” even as the company makes a major push into the metaverse.

Weisfeld estimated that META would spend between $10B and $15B a year on developing metaverse technologies over the next five to seven years. Even with this massive investment, the Jefferies analyst contended that shares currently have a “very reasonable” valuation, even with lingering concerns about the firm’s legacy Facebook business.

“You’ve got very real concerns in terms of the advertising budget slowdown. You’ve got very real concerns on TikTok. But, at the end of the day, we certainly think that’s factored into the current valuation,” he said.

For a more cautious outlook for META, read a deep dive from Seeking Alpha contributor Stocks and Savings, who describes the stock as “Meta without the verse.”

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