Meta and Microsoft buy levels for investors looking to start positions
Here’s our Club Mailbag email investingclubmailbag@cnbc.com — so you send your questions directly to Jim Cramer and his team of analysts. We can’t offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries. This week’s question: I would like to start a position in Meta and Microsoft, but am unsure how, when the stocks are up this high. Is it too late? If I have to wait for a pullback, how much of a pullback should I wait for? – Ann S. It’s not too late to start positions in Meta Platforms and Microsoft because, from a fundamental perspective, we think both stocks are solid long-term investments. Nonetheless, as indicated by our 2 ratings on both names, we do think waiting for a slight pullback before buying would be prudent. Looking at their charts below for buy levels from a technical standpoint, we tend to start our analysis by looking at the 50-day and 200-day moving average – represented by the green and maroon lines, respectively. From there, we look for long-term support and resistance levels – represented by the horizontal black lines. But, more than the exact prices, we want to show investors how to spot the moving averages and long-term trends. At the Club, we are first and foremost fundamental investors, but we do look to technical analysis as another tool to help out. Meta buy levels: $738, $722, $638 Starting with Meta Platforms, the first level of interest would be around $738 per share, a level that proved to be resistance twice over the past year before the stock broke above it on the back of a strong earnings report. A move to $738 would represent a pullback of roughly 6% from current levels around $788 and put shares at just under a price-to-earnings valuation of 25 times 2026 earnings estimates. The next level down would be the 50-day moving day at around $722. Given that we are above that average, we would look to it for support per the polarity principle – past resistance, once broken, typically becomes support. A move to $722 would be a pullback of just under 8%. The 200-day moving average at $638 is well below the 50-day, typical of a stock that has been on a run like Meta. That would be a pretty significant decline of about 19% and put shares at just over 21 times 2026 estimates. The $638 level would only come into play if the 50-day were breached. Microsoft buy levels: $502, $455, $438 Jumping to Microsoft, the 50-day is currently at around $502, about 4% below current levels around $524 and just over 6% off the stock’s all-time closing high. That’s a decent-sized pullback to start a position. From there, however, we don’t see much in terms of support until we get to around $455, a level that previously served as resistance earlier this year before it was breached in late May. A move to this level would put shares at under 30 times fiscal year 2026 earnings estimates, about the midpoint of the P/E range seen over the past five years. From there, the 200-day moving average is around $438, a roughly 16% decline from current levels. Bottom line While the 200-day moving averages are pretty far down for both Microsoft and Meta, those levels are not out of the question if there were a broad-based market pullback. The 200-day moving average is usually a solid level to hold your nose and do some buying, assuming that there’s no change to your longer-term investment thesis. That said, we don’t foresee a major correction as the Federal Reserve is expected to cut interest rates next month and possibly two more times before year-end. The Fed cut rates three times at the end of 2024 but has kept them steady ever since. We also don’t think that trying to play a correction is in the best interest of those looking to make money. In the words of famed investor Peter Lynch, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves.” (See here for a full list of the stocks INJim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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