Meta Platforms was looking like the best Big Tech stock in the market when the year began. But investors’ fears of legal risks and heavy spending on artificial intelligence are bubbling to the surface, culminating in last week’s 11% rout.
Shares of the Facebook and Instagram parent are down 17% this month, putting them on pace for their worst performance since October 2022. That was when Meta gave a disappointing revenue outlook, and Chief Executive Officer Mark Zuckerberg pleaded with investors to stay patient with the company’s ballooning spending on the metaverse.
Today, Meta is deemphasizing the metaverse to focus on artificial intelligence. But the concerns about runaway spending have only grown. And there’s a rising existential risk surrounding the company after a jury in New Mexico found that Meta misled teenagers in the state about the safety of its social networks, and Meta and Alphabet — Google’s parent company?—?were found liable in a trial related to social-media addiction. The stock has lost $280 billion in market capitalization in March alone.?
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