NEW YORK, 30 March 2026 — Meta Platforms (NASDAQ:META) has shed approximately US$310 billion in market value in March, as investor concerns over mounting legal risks and heavy artificial intelligence (AI) spending weigh on the social media giant.
The stock has declined 19% this month, putting it on track for its worst performance since October 2022, when the company faced backlash over its metaverse investments. Shares are now down 33% from their all-time high and have significantly underperformed the Nasdaq 100 Index.
Legal Risks Add Pressure
Investor sentiment has deteriorated following a jury ruling in New Mexico that found Meta misled teenagers about the safety of its platforms. In a separate case, both Meta and Alphabet Inc (NASDAQ:GOOGL) were found liable in a trial linked to social media addiction.
The rulings have raised concerns that the industry could face long-term regulatory and litigation risks similar to those experienced by the tobacco sector.
“I don’t necessarily see this as the same as tobacco, but stranger things have happened,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.
“Some would say the only way to remove any negative impact of social media is if you shut the whole thing down. Obviously that would just devastate the company,” he added.
Analysts have also flagged growing legal overhang risks as more cases head to trial, with potential implications for how platforms design services for younger users.
AI Spending Concerns Intensify
Meta’s pivot from the metaverse to AI has not fully reassured investors, with concerns now shifting to runaway capital expenditure.
The company’s free cash flow is projected to fall 83% to below US$8 billion this year, down sharply from US$46 billion in 2025, even as revenue continues to grow.
Capital expenditure is expected to surge 77% to US$123.5 billion in 2026, and could exceed US$140 billion by 2027, reflecting aggressive investment in AI infrastructure.
Meta has also initiated job cuts involving several hundred employees as part of its cost restructuring.
Mixed Outlook on Wall Street
Despite near-term concerns, analysts remain broadly optimistic on Meta’s long-term prospects.
According to Bloomberg data, 72 out of 80 analysts rate the stock a buy, with only one sell rating. The average price target implies a 64% upside over the next 12 months, the strongest projected return since 2022.
Meta’s revenue is expected to grow about 25% this year, up from 22% growth in 2025, signalling continued strength in its core advertising business.
However, some strategists warn that legal risks could continue to weigh on the stock in the near term.
“This is the persistent question we have gotten from investors… Is this Meta’s Big Tobacco moment?” said Mark Mahaney. “It’s possible, but we think unlikely.”
At the same time, Meta’s valuation has become more attractive. The stock is trading at around 16 times forward earnings, its lowest level since March 2023, making it the cheapest among the so-called “Magnificent Seven” tech stocks.
“So far the penalties have been small, and it can adopt new parameters to diminish the issues behind the suits, so I don’t see this as a tobacco-like overhang,” said Phil DeAngelo.
“At the same time, Meta has gotten extremely attractive, and the acceleration in revenue shows that even though the level of spending is huge, it knows how to monetize the investments,” he added.
