Key Highlights

● Meta ended a five-session losing streak on Thursday.

● Bill Ackman called the stock "incredibly undervalued" in a media interview.

● The shares rebounded above the $625 price of the recent $25 billion offering.

● Capital spending guidance was raised to a range of $135 billion to $145 billion.

A high-profile endorsement from Pershing Square's Bill Ackman helped Meta Platforms (NASDAQ:META) snap a losing streak on a day when much of Big Tech was in retreat.

An endorsement at the right moment

Meta Platforms had been bleeding for five straight sessions. On Thursday, it finally stopped. The stock climbed on October 29 after Bill Ackman, the chief executive of Pershing Square, said in a media interview that the stock was "incredibly undervalued," according to media reports.

The gain came on a day when the Nasdaq-100 fell to 29,402.51 and Meta's mega-cap peer Alphabet (NASDAQ:GOOGL) suffered its worst session since its 2004 IPO. Midday market data put Meta around $629.16, and the stock held onto its advance into the close.

How Meta got here

The slide that preceded Thursday's bounce followed two announcements. Meta had laid out an Equity Financing plan of about $97.5 billion, including a $25 billion share offering priced at $625. It had also raised its Capital spending guidance to a range of $135 billion to $145 billion.

Both moves fed into the market's growing unease about how much the largest technology companies are spending on artificial intelligence, and how they are paying for it. Issuing shares dilutes existing owners, and a bigger capex budget means less free Cash Flow in the near term.

Ackman's comments gave investors a reason to look past those concerns, at least for a day. The stock's rebound above the $625 offering price was a symbolic milestone for buyers in that deal.

Picking winners in the AI trade

Thursday's market was a lesson in selectivity. Alphabet's results, which included negative free cash flow of $9.07 billion, wiped out roughly $500 billion in Market Value and revived what one news report described as "concerns over mounting AI costs." Microsoft (NASDAQ:MSFT) ended roughly flat, while Amazon (NASDAQ:AMZN) slid before its report.

Yet Meta and Apple (NASDAQ:AAPL) both rose as investors sorted the AI spenders they trust from those they do not. "There's plenty of other places to go with your money outside of the AI trade that have pretty decent prospects," one Investment strategist told a news agency, a reminder that the rotation was not purely about technology.

One market analyst summed up the new mood: "markets are no longer rewarding companies simply for investing heavily in AI."

A broad rally under a falling index

Beneath the headline indexes, most stocks did well. More than 400 S&P 500 members finished higher even as the benchmark slipped 23.59 points to 7,720.39. The Russell 2000 rose 28.71 points to 2,859.22. Communication services, the sector that houses both Alphabet and Meta, was the worst performer in the S&P 500, making Meta's gain a notable exception within its own group.

The economic data added a hawkish edge. Third-quarter GDP grew faster than economists expected, and September PCE Inflation ran hot. That kept traders leaning toward a December rate hike from the Federal Reserve, which held steady on Wednesday in a 10-2 vote.

What to watch

The key question for Meta is whether Thursday marked a turning point or a pause. Investors will be tracking whether the stock can hold above the $625 offering price and how the market digests the scale of its spending plans as other giants report.

Amazon's after-hours slide on Thursday, tied to its $220 billion capex plan and negative free cash flow, suggests the market's patience with AI spending remains thin. Friday's Employment Cost index and the Fed's December 8 to 9 meeting could also sway sentiment toward Growth Stocks across the board.