Options Remain Red-Hot on AI Favorite META

Subscribers to Chart of the Week received this commentary on Sunday, April 12.

Mark Zuckerberg’s Meta Platforms Inc (NASDAQ:META) has been anything but quiet in its quest to best the competition in the AI space, just this past week penning an extension to its partnership with CoreWeave (CRWV). The deal expanded to $21 billion, adding to a previously valued $14.2 billion deal it already held with the AI cloud platform. Below, we’ll look at some of the company’s recent AI-induced activity, chart performance, and where options traders fit into the equation.

Meta signed a multi-year agreement with Advanced Micro Devices (AMD) in February and with Nebius (NBIS) in March, another two layers of backing on top of its long-standing Nvidia (NVDA) deal. This aggressive approach seems to be paying off for the Facebook parent, though headwinds have come in the form of legal woes, including a jury finding the company liable for causing harm to children’s mental health in late March. This has hardly impacted the equity, however, which has already gained nearly 10% this month.

META is looking to shave off more of its 5.2% year-to-date deficit, while the shares trade flat near $625.38. News of its deal with CoreWeave pushed the social media stock to a third-straight win yesterday, about two weeks after it came just shy of a fresh 52-week low.

It’s important to note the stock has been under the pressure from the descending 120-day moving average since suffering an Oct. 30 bear gap of 11.3%, its worst drop in three years. Increased attention has only encouraged options traders, with META making consistent appearances on Schaeffer’s Senior Quantitative Analyst Rocky White’s list of most active options in the past 10 days.

META has seen 4.9 million calls and 3.6 million puts exchanged during the past two weeks, with the most action seen at the January 15, 2027 750-, 700-, and 800-strike calls. This suggests investors are looking toward the future of META, betting on up to roughly 30% upside to current levels in the next nine months.

Options traders lean extremely bearish toward META. This is per the stock's 50-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 99% of annual readings. An unwinding of this pessimistic attention could result in more tailwinds for the shares.

As far as affordability goes, META looks well-priced, per its Schaeffer's Volatility Index (SVI) of 34%, which sits in the 26th percentile of its annual range. In other words, options traders are pricing in unusually low volatility expectations.

Only time will tell if META’s long-term bull traders will enjoy the fruits of their labor, but one can be certain Meta Platform will continue making AI-related headlines. Plus, the company’s first-quarter earnings report is due out at the end of this month, which comes on the back of January’s strong Q4 beat.