Shares of Meta are poised for a flat-to-negative start on Friday, March 27, after a massive decline in the last trading session. Meta’s stock plunged almost 8% in overnight trade, which pulled it below a key moving average, and opened the possibility of a further downside.
CEO Mark Zuckerberg-led Meta Platform’s stock closed Thursday’s session 7.92$ down at $547.75 after US courts this week found social media platforms liable for building services that facilitated addiction among children. Meta stock is down almost 16% in 2026 so far and trades at a level seen 10 months ago.
What’s causing a decline in Meta shares?
The latest selloff came after two US courts held Meta liable for misleading users about the safety of its social media apps, leaving children at the target of online predators. Meta operates social media platforms like Instagram and Facebook.
According to a Reuters report, the Los Angeles jury found Meta and Google liable on Wednesday for a young woman’s depression linked to alleged addiction to Instagram and YouTube, awarding $6 million in damages. In the New Mexico case, jurors ordered Meta to pay $375 million for misleading users about the safety of its platforms for children and enabling their exploitation.
While the penalties are small, the verdicts could trigger a wave of litigation, raising concerns around future cash flows and margins.
Recent legal setbacks in the US have raised the risk of prolonged litigation and potential payouts, which markets tend to discount aggressively, said Harshal Dasani, Business Head at INVasset PMS.
At the same time, Meta’s aggressive push into AI—through massive data centre investments and sharply higher capex guidance—has triggered concerns around near-term free cash flow compression, said Dasani, underscoring any factor pressuring the stock despite stable operating performance.
Fundamentally, Meta remains strong. Meta earlier in January announced a rise in capital spending plans for this year by 73% in the pursuit of “superintelligence”. Its profit and revenue beat estimates in the December quarter, while forecasting revenue between $53.5 billion and $56.5 billion for Q1 of 2026, compared with analysts’ average estimate of $51.41 billion, according to data compiled by LSEG, showed a Reuters report.
The fourth quarter revenue rose 24% YoY to $59.89 billion, while net income was higher by 9% at $22.76 billion.
How to trade Meta shares?
However, from a trading perspective, the setup is still weak.
Viram Shah, Co-Founder and CEO, Vested Finance, said that Meta trading below its 100-DMA may signal near-term price weakness. However, he finds such indicators largely relevant for traders, not long-term investors. “In my view, for a business like Meta, price action around moving averages tends to be noise within a much larger compounding journey.”
Over the last decade, Meta has delivered ~20%+ annualised returns, despite multiple phases where the stock corrected sharply or broke key technical levels.
These drawdowns are usually part of how large technology companies compound over time, said Shah. According to him, the approach should be simple: separate trading signals from investment decisions. “Use volatility and corrections as opportunities to build exposure gradually, rather than reacting to short-term technical breakdowns,” he said.
That said, Dasani finds Meta stock in a “sell on rise” phase until it reclaims key moving averages. “Immediate support lies near the recent lows, while any bounce toward the $580–600 zone could face resistance. For investors, this is not yet a clean accumulation zone; patience is key,” he advised.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
