Meta Platforms (NASDAQ: META) saw its share price target lowered on Monday, March 30, even though Morgan Stanley dubbed it a “top pick.”
Yesterday, shares of Facebook and Instagram owner Meta Platforms (Nasdaq: META) dropped nearly 8% in a single trading session, ending the day at $547.54 per share.
Meta Platforms stock has entered a stunning bear market, with shares down nearly 35% from 2025 highs, yet management remains committed to aggressive AI investment. META is confidently ramping up AI infrastructure and partnerships, but the market demands clear monetization beyond advertising to justify elevated capital outlays and valuation rerating. Despite legal headwinds and heavy AI spending, META trades at a forward P/E of 17.4x, which is even below the S&P 500, as pessimism returned to haunt investors.
James Czerniawski explains why the social media addiction lawsuit against Meta Platforms (META) and Alphabet's (GOOGL) YouTube is so significant. He outlines ways the decision trickles into price action after the Mag 7 giant sold off 11% this week.
Investors are worried that recent adverse legal rulings could open the door for widespread further penalties.
The Nasdaq slumped 3.23% this week, its worst drop since April 2025. Meta slid more than 11% after two court defeats, and Micron fell more than 15% as investors rotated out of the memory company following a huge pop.
Meta Platforms, Inc., faces a significant legal setback from the NMDOJ, challenging Section 230 protections and imposing $375mm in penalties. I remain confident that META's core user adoption and advertising revenue will not be materially impacted by these legal headwinds. Despite a -29% share price decline, META trades at 13x EV/EBITDA, and I reiterate a Strong Buy for META stock with an $893/share target at 17x eFY27 EV/EBITDA.
Meta's California case is one of thousands of lawsuits the company, TikTok, YouTube and Snap face in state and federal courts, the Wall Street Journal reported. A judgment against Meta and Google may lead to mass litigation that could last for years, similar to legal campaigns against the tobacco industry in the 1990s, legal experts told the Journal.
Meta shares fell nearly 4% Friday, while the previous day's decline erased $21 billion off Mark Zuckerberg's net worth as investors feared a “Big Tobacco”-like legal reckoning following two back-to-back courtroom losses.
Meta Platforms, Inc. trades at a forward P/cash ratio near 10x, too cheap either in absolute or relative terms. I see META's restructuring plan more as a strategic efficiency move. The plan could potentially yield $8B in annual cost savings and a 2–3% margin expansion to an already highly profitable business.
Shares of Meta Platforms extended their selloff on Friday, as mounting legal setbacks weighed on investor sentiment, but the recent decline also points to a deeper concern building beneath the surface. While US court verdicts have triggered immediate losses, investors are increasingly focused on the broader implications for Meta's business model and future risk profile.
Meta Platforms deepens AI push with Arm CPUs, and plans up to $135B 2026 capex as data center demand and energy needs surge.