Meta's Stock Plummets Following Landmark Verdict on Product Addiction
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 28 2026
0mins
Should l Buy META?
Source: Fool
- Legal Ruling Impact: A California jury found that Meta and YouTube designed their products to be addictive, causing mental health issues, marking the first time social media has been recognized as causing personal injury, which could open the floodgates for similar lawsuits against Meta.
- Compensation Amounts: Meta is required to pay $4.2 million in the California case and $375 million in New Mexico, and while these amounts are relatively small for the company, they could impact its reputation and lead to a reevaluation of social media usage among the public.
- Market Reaction: Following the verdict, Meta's stock fell by 3.91%, bringing its year-to-date decline to 17%, despite a 24% revenue growth in the fourth quarter, indicating that legal challenges may be weighing on investor confidence and pressuring the stock price.
- Future Outlook: Meta and Alphabet plan to appeal the ruling, while also facing the risk of Congress revisiting Section 230, which could alter the legal protections for social media companies, increasing operational uncertainties for Meta moving forward.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 579.230
Low
655.15
Averages
824.71
High
1117
Current: 579.230
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Industry Trend Shift: As firms shift focus from energy-intensive GPU training to efficient CPU inference, Arm's market positioning is likely to enable it to capture more market share over the next decade, particularly within the capital expenditures of major tech companies.
See More
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See More
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See More
