NEWS
Meta Delivers Blowout Earnings, Calming Fears Over Rising AI Spending 🚀

Meta Platforms reported a stellar Q1 earnings beat on Wednesday, putting investor worries over rising AI-related spending to rest — at least for now. The company posted earnings per share of $6.43, far exceeding Wall Street's expectation of $5.23 and up from $4.71 a year ago. Advertising revenue also topped forecasts, hitting $41.39 billion versus an expected $40.43 billion.

Despite this strong performance, Meta raised its full-year capital expenditure forecast to $64–$72 billion, up from $60–$65 billion previously. This sharp increase — compared to $39 billion in spending last year — had prompted concern heading into earnings season, particularly amid fears of slowing ad growth due to tariffs and broader economic uncertainty.

However, Meta’s results eased those concerns, with shares rising 5.8% in after-hours trading. Analysts pointed to stronger-than-expected ad growth, especially on a constant-currency basis, as a key factor giving Meta the flexibility to invest aggressively in AI infrastructure.

Meta justified the spending hike by highlighting the increasing demand for AI compute power and its ambitions to lead in AI-driven services — both for internal use and external applications like ad targeting. The company has also expanded ad placements across new platforms, including Instagram’s Threads and WhatsApp, helping offset potential weakness in ad budgets impacted by global trade tensions.

For Q2, Meta expects revenue between $42.5 billion and $45.5 billion — with the midpoint above analyst expectations — signaling continued confidence in its ability to grow, even as tariff pressures linger.

MARKET
Growth Stocks Leading the Charge

Yesterday’s market movements were a bit of a rollercoaster, starting with a sharp drop after the U.S. reported Q1 GDP numbers showing a 0.3% contraction in economic growth. Investors initially reacted with fear, pushing stocks down by 2%. But as the day went on, the mood shifted.

It turns out that the negative GDP print wasn’t as alarming as it seemed at first glance. The drop was partly due to a quirk in the way GDP is calculated. Many companies had accelerated their import orders to get ahead of looming trade tariffs. This caused an artificial dip in the GDP number since imports are subtracted from the total until they’re sold domestically. In reality, underlying economic activity remained strong.

By the end of the day, stocks had recovered, and now, in premarket trading, we’re seeing a strong gap up. This suggests that the market has absorbed the bad news and is moving past it. When negative data like this gets absorbed without causing further damage, it’s often a sign that the market is ready for a rebound, especially after a prolonged period of selling throughout 2025.

Nasdaq

The QQQ is showing a strong setup today, driven by significant gap-ups across all the major tech stocks. This has led to a standout performance from the megacaps, which are currently outperforming the broader market. Right now, the QQQ is poised to break above its point of control (POC) and reclaim the critical 200-day EMA — a key level that we need to see hold for further bullish momentum.

What’s particularly encouraging is how the market behaved yesterday. The QQQ, like many other sectors, experienced an intraday retracement to its rising 10-EMA. However, this was met with stubbornly aggressive buyers who stepped in with strong volume, ultimately driving the QQQ back to recover all of the lost ground. This behavior is overwhelmingly positive, especially when considering that it happened below the POC and just under overhead supply.

This price action is telling us that the market isn’t as concerned about the overhead resistance as it may have been in the past. The fact that buyers were so persistent and able to recover quickly signals strength and resilience in the market. Based on this, we’re expecting a very strong close to the week in the QQQ, and we may look to enter long positions here as we see solid potential for further upside (through a leveraged Nasdaq ETF).

The equally weighted version of the Nasdaq, QQQE, is also showing the same promising development, and this is something we want to highlight. It's very healthy to see both the QQQ and QQQE behaving in a similar manner, as it suggests broad strength across the entire Nasdaq index, not just driven by a few heavyweights.

What this tells us is that the rally isn’t just concentrated in a handful of large-cap stocks, but rather the overall market is gaining momentum, with many stocks participating in the move higher.

S&P Midcap 400

The midcaps also held their ground very well, showing a strong relative volume bounce off their key rising 10 and 20-EMAs. This is pushing us to expect a test of the overhanging Point of Control (POC) either today or tomorrow. While the midcaps aren't necessarily where we expect the most strength in the short term, as we anticipate the major net inflows to be directed towards big and mega-cap tech names (the MAGS) posting earnings over the next week, we do see midcaps benefiting from this broader strength.

In other words, while the primary focus will be on the MAGS (Meta, Apple, Google, and Microsoft), we're likely to see sympathy plays in leading midcap stocks. As these larger tech names perform well, some midcap stocks are likely to see increased interest as investors rotate into smaller-cap names that may offer more growth potential.

Russell 2000

Small caps are poised to offer the most volatile and aggressive breakout plays if this marks the beginning of the next leg higher for the broader equities market. These companies, with their smaller market caps, typically exhibit higher ADR% (Average Daily Range), meaning it takes less capital to move their stock prices. In essence, it's much easier for a $300 million company to double in price than a $300 billion company, making them more susceptible to sharp price moves.

A standout example of this aggressive momentum is RGC, which has already delivered a +110% breakout since Monday, including an extraordinary +89% surge in just one day yesterday. This highlights why, in certain market conditions, it's critical to prioritize technicals over fundamentals.

When stocks show such intense momentum, they often detach from fundamental expectations. In these situations, technicals become the key driver of price action. The fundamental reason for a stock's rally in the first place is simply supply versus demand — and when demand outpaces supply, the stock moves.

DAILY FOCUS
When Markets Rotate, Rotate With Them

We're seeing a notable shift in the market right now, one that demands our attention. Growth stocks, which had previously been stuck below resistance levels, are beginning to break through — and this is a strong bullish signal. More and more of these stocks are showing relative strength, pushing higher despite ongoing market challenges.

What makes this particularly interesting is how bad news is no longer having the same effect. In the past, negative data would trigger a swift sell-off. But today, that same news is being absorbed quickly, and the market is holding steady. This resilience is a powerful sign that demand is outweighing fear, and that buyers are stepping in to support the market.

We’re also seeing a clear emergence of relative strength leaders. Stocks that have been stagnating or struggling to break higher are now showing real momentum, moving beyond their previous resistance points. This shift in behavior indicates that these stocks are in a position to lead the market, and that growth is making a comeback.

The bottom line? We are seeing very compelling reasons to start getting aggressive and begin deploying that precious capital we’ve been holding onto during the more cautious months. The market is shifting, and the stocks showing strength are set to lead the charge. It’s time to rotate with the market and seize the opportunities unfolding before us.

WATCHLIST
The Top Trades Today

HOOD: Robinhood Markets, Inc.

• Yesterday, HOOD posted earnings that exceeded expectations, delivering overwhelmingly positive results. Despite a modest gap up following the report, the stock is showing clear signs of strength, especially given the broader context. While the move may not be as dramatic as some of the larger tech giants like META, the technical setup here is just as compelling.

• HOOD is currently breaking out from a solid multi-month base, with a notable demand candle from yesterday signaling strong interest around the rising 10-EMA. This suggests that there’s significant support in this region and buyers are stepping in aggressively. Moreover, the stock has formed an exaggerated double bottom pattern, further reinforcing the bullish sentiment.

MSFT: Microsoft Corp.

• Today, MSFT is a key stock to focus on as it has posted a textbook earnings pivot (EP) setup. The stock experienced a significant, high-volume gap up in premarket trading, indicating strong demand and a shift in sentiment. What's particularly important here is that the gap up has propelled the stock over all of its key EMAs, including the declining daily 200-EMA.

• This is a critical technical development, as MSFT is breaking through a major resistance point, signaling a potential new phase of upward momentum. The aggressive move and the strong volume indicate that this could very well mark the beginning of MSFT's next major rally. From a risk-to-reward perspective, entering at this stage presents a very good opportunity.

If you're interested in getting our full focus list for today, along with a deeper dive into how we identify these stt, you can learn more about Swingly Pro here.

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