With the likelihood of further escalation in trade wars significantly reduced, alongside confirmation that President Trump will not seek to replace Federal Reserve Chairman Powell, confidence in the U.S. dollar and Treasurys is being restored. This creates an opportunity to invest in high-quality tech stocks such as Meta Platforms that have been sold off in recent weeks. META offers a compelling valuation, strong growth in artificial intelligence and augmented reality, and a favorable risk to reward for adding bullish exposure. With the stock poised for a rally, a high implied volatility (IV) environment allows us to capture elevated premiums while positioning for upside. Trade timing The timing for adding bullish exposure to META is optimal, as the stock has pulled back to its $480 support level and formed a double bottom. This pattern, combined with reduced trade war fears and renewed confidence in the U.S. dollar, suggests a potential reversal and swift rally, making this an attractive entry point with a strong risk to reward. Fundamentals META trades at a slight premium to its industry on a forward PE basis but offers far superior profitability, positioning it as a top tech pick in a recovering market. Forward PE ratio: 20.5x vs. Industry Median 19.5x Future 3-5Y EPS growth: 12% vs. Industry Average 13% Future 3-5Y revenue growth: 13% vs. Industry Average 13% Net margin: 38% vs. Industry Average 16% Bullish Thesis Leadership in AI: AI has been a cornerstone of its growth strategy, and recent advancements highlights its leadership in this space with the release of Llama 4. AR and VR ambitions: The Meta Quest 3S, benefits from AI-driven enhancements with advanced hand-tracking and mixed reality capabilities, positioning META as a leader in accessible mixed reality. Attractive valuation and growth: Despite a forward PE of 20.91 (vs. 19.39 industry median), META’s net margin of 37.91% (vs. 6.36% industry average) and leadership in AI and AR position it for strong growth. Trade timing: A double bottom at $480 support signals a potential reversal, offering an attractive risk/reward for a rally. To capitalize on META’s potential upside, I’m selling a May 30 $520/470 put vertical @ $22.70 credit. This entails: Buying the May 30 $470 put @ $19.50 Selling the May 30 $520 put @ $42.20 The maximum reward is $2270 if META is above $5520 at expiration. The maximum risk is $2730 if META is below $470 at expiration. The breakeven point for this trade is $497.28 View this Trade with Updated Prices at OptionsPlay . This strategy positions you to benefit from META’s anticipated rally, leveraging its technical reversal, attractive valuation, and macro tailwinds to profit from a high-quality tech name with defined risk. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited! DISCLOSURES: Zhang has a position in META. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
