Americký prezident Donald Trump se v nakupování cenných papírů činí i v létě. Z nově zveřejněného finančního přiznání amerického Úřadu pro vládní etiku (Office of Government Ethics) vyplývá, že v červnu provedl více než tisíc transakcí, přičemž celková hodnota obchodů se pohybovala mezi 78 až 263 miliony dolary. Dokument uvádí u jednotlivých transakcí pouze hodnotová pásma, nikoliv přesné částky.
Mezi největší obchody se zařadil prodej podílu v ETF od společnosti Vanguard, jehož hodnota se pohybovala mezi pěti a 25 miliony dolarů. Významné pak byly nákupy akcií společností Berkshire Hathaway, Visa, Mastercard či Cintas, informovala agentura Bloomberg.
Trump, respektive nezávislí manažeři spravující jeho portfolio, provedli také sérii obchodů s akciemi Palantiru. Začátkem června nejprve nakoupili menší objem akcií, následně část pozice během měsíce prodali a po oznámení dohody mezi Spojenými státy a Íránem se k nákupům znovu vrátili, všiml si Bloomberg.
V případě Berkshire Hathaway prezident v polovině června nakoupil akcie v hodnotě až několika milionů dolarů a později část pozice prodal. Třeba u Mety Platforms naopak nejprve prodával v objemu jednoho až pěti milionů dolarů a následně ke konci měsíce opět menší objemy dokupoval. V seznamu obchodovaných společností se objevily rovněž Coinbase či Home Depot.
Podle zveřejněných dokumentů Trump v průběhu celého roku 2025 uskutečnil více než 21 tisíc obchodů s cennými papíry. Jejich souhrnná hodnota se pohybovala mezi 600 miliony a 1,86 miliardy dolarů. V některých případech přiznání ukazuje nákupy a prodeje stejného titulu uskutečněné ve stejný den.
Bílý dům odmítá, že by rozsah obchodní aktivity představoval střet zájmů. Administrativa zdůrazňuje, že investiční portfolio prezidenta spravují nezávislí manažeři bez jeho přímého vlivu. Podle mluvčího Bílého domu Davise Inglea jsou aktiva držena na diskrečních účtech a investována prostřednictvím modelových portfolií, která automaticky kopírují vybrané akciové indexy.
„Ani prezident Trump, ani žádný člen jeho rodiny nemá žádnou možnost řídit, ovlivňovat nebo poskytovat informace ohledně toho, jak je v rámci portfolia investováno nebo kdy jsou investice nakupovány či prodávány. Veškerá investiční rozhodnutí činí výhradně nezávislí manažeři,“ uvedl mluvčí.
Také Eric Trump, výkonný viceprezident Trump Organization a Trumpův syn, už dříve uvedl, že majetek je veden v blind trustu.
With a share price that has soared 996% in the past five years (as of Aug. 20) and a market capitalization of more than $5.2 trillion, the consensus view among the investment community may be that Nvidia is the optimal way to bet on the artificial intelligence (AI) boom.
However, investors should take a closer look at Meta Platforms (META +0.75%), which is in a very advantageous position. Here's one powerful reason that supports the case for why this business might be the best AI stock to buy and hold for five years and beyond.
Image source: The Motley Fool.
Consumers are different from enterprises, supporting ad-based monetization Anthropic recently revealed it generated $65 billion in annualized run-rate revenue in July, seven times higher than a year ago. It cornered the AI market for enterprises, a smart move.
The ability for AI companies to monetize their products and services via subscriptions is much better when targeting enterprises. These corporate customers are fine paying for AI tools since they can possibly boost employee productivity. It's an operating cost that can potentially drive higher revenue and earnings.
Consumers are different. They aren't known for having a willingness to shell out money for software. They don't want to pay a monthly fee for access to an AI chatbot, either. Only 3% of households were paying for AI tools in February, according to Bank of America Institute.
The logical conclusion is that the best strategy is to offer AI products and services to consumers for free. And then this usage can be monetized through advertising. This plays right into Meta's advantage.
The company has distribution (3.6 billion daily active users across its family of apps), engagement (time spent on Instagram was up double digits in the second quarter), an established ad ecosystem (Ads Manager, Ads Auction, Advantage+), and a vast amount of data. This is why Meta's ad business is so dominant and lucrative.
It seems Mark Zuckerberg is well aware of the impact this revolutionary technology will have on his business. "Over the coming years I think that the increased productivity from AI will make advertising a meaningfully larger share of global GDP than it is today," he said on the Q1 2025 earnings call.
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AI will strengthen the flywheel Meta's management team certainly knows about this monetization opportunity. It makes sense why the company is spending so much money, even though it doesn't have a cloud computing platform like the other hyperscalers. Capital expenditures are expected to total $137.5 billion this year (at the midpoint).
Forget about the business having the opportunity to sell excess compute to outside customers at a premium. Meta is developing its own frontier AI models that can directly benefit exiting operations. This technology can improve the entire advertising flywheel.
There's a feedback loop Meta possesses that can be strengthened with AI. On one side, AI can enhance recommendations and boost engagement. On the other side, AI can provide advertisers with better creative and targeting capabilities, leading to improving return on investment and more ad spending from customers.
Consequently, Meta can collect more revenue. And this entire ecosystem is constantly getting better.
On the engagement front, Meta is working on introducing new consumer AI experiences. The company sees a future in which "billions of people" have personal agents working nonstop to help them achieve their goals. This is part of the overarching vision to introduce personal superintelligence to the world.
Maybe the best opportunity in the AI space doesn't exist at the infrastructure layer. Industry observers argue that as the AI trend progresses, chips, cloud platforms, and AI models will become commoditized.
So, lucrative investments might come from companies that can leverage this impressive technology to improve their current operations. It appears as though Meta is well-positioned to bolster its advertising machine.
Meta Platforms (META +0.75%) CEO Mark Zuckerberg released a 6,500-word manifesto detailing how the company will make agentic artificial intelligence (AI) a mainstream resource.
"Everyone will have an exceptionally capable personal agent that understands you, your goals, and everything you care about," Zuckerberg said in his open letter.
Superintelligence can revolutionize industries and give consumers access to more valuable tools, but what about investors? Here's how the company's efforts to double down on its AI buildout will affect shareholders.
Image source: Getty Images.
Superintelligence can diversify Meta Platforms' revenue It's no secret that Meta Platforms makes almost all of its revenue from online advertising. It represented 97.6% of total revenue in the second quarter, with "Other revenue" and Reality Labs making up the remaining sliver.
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Meta Platforms has been trying to diversify beyond online advertising for several years. Other tech rivals like Amazon and Alphabet have diversified into multiple industries, with online advertising still playing a key role.
Meta Platforms fumbled with the metaverse, and subscription revenue hasn't been moving the needle much. AI agents can initiate the revenue diversification Meta Platforms has been seeking for years. A push into neocloud services, which Zuckerberg floated earlier this year, can also aid the company in unlocking new income streams.
This development can make the company less reliant on advertising, which is still a fast-growing segment. The stock only trades at a price-to-earnings (P/E) ratio of 20, which is a low valuation just for the online advertising component. Any meaningful commercial progress with the superintelligence buildout can trigger a big rally, especially if online advertising revenue growth rates remain elevated.
Meta Platforms is still losing a lot of money on AI Meta Platforms is still doing fine. Revenue jumped by 28% year over year in the second quarter. Operating income dipped by 8% year over year, but it may be a small price to pay if diversification efforts pay off.
"If" is the big problem here. The Metaverse debacle was a few years ago, but high capital expenditures without the payoff can bring that memory back. Reality Labs produced a $4.6 billion operating loss in the second quarter, while online advertising operating income slightly decreased year-over-year.
Although Meta Platforms doesn't face many competitors in the AI landscape, a few hyperscalers can quickly secure a large portion of the market. For instance, Amazon, Microsoft, and Alphabet control more than 60% of the cloud computing market. Oracle, the fourth-largest cloud provider, only has a 4% market share. A similar setup with AI agents that doesn't include Meta Platforms at or near the top can make it harder to justify increased spending.
Big investments in AI are necessary for the company to keep up with other tech leaders and finally diversify beyond online advertising. Meta Platforms is correctly acting upon this opportunity, but it must translate this spending into commercial success while pivoting back to positive operating income growth rates to reignite the stock.
Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle. The Motley Fool has a disclosure policy.
In the artificial intelligence (AI) arms race among the big tech firms, there have been two major laggards: Apple (AAPL -0.63%) and Meta Platforms (META +0.75%). Apple is on this list for a lack of AI investments, while Meta Platforms is on this list for spending heavily on AI computing but having little to show for it.
The question is, can either of these two tech titans turn their AI aspirations into a cash-generating business? Let's take a look.
Image source: Getty Images.
Apple hasn't made the investment that its peers have When you hear about the AI hyperscalers, Apple is notably absent. Instead of spending hundreds of billions of dollars building out data centers to develop its own AI, it was perfectly happy to sit on the sidelines, letting others do the hard work. Now that the initial phases of the AI build-out are complete, the results of this decision remain unknown.
Apple has partnered with Alphabet to integrate Gemini into its devices, but that collaboration is still being rolled out. Meanwhile, its Android competitors have already integrated AI into several aspects and have established a pretty large lead in AI capabilities, but that's nothing new with Apple.
The company has seldom been the first to launch a new product type or feature, as it often takes its time to ensure that what it launches is the best. Time will tell whether this proves possible, but with Apple waiting this long, it may not be going as well as investors hope.
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As a bull case, Apple launches its AI products and includes an AI subscription that ends up being a hit among its users. That could lead to billions more in revenue and profits, making it a smart investment.
On the bear side, Apple falls behind in AI and is stuck paying massive cloud infrastructure fees to run AI workloads because its plans for on-device AI processing don't pan out.
Time will tell how these two sides fare, but Apple is currently behind in AI, and that's nothing it hasn't dealt with before.
Meta has spent big, with minimal returns Meta Platforms has spent hundreds of billions of dollars on its AI computing capacity and is offering a free-to-use AI model. Most of the financial benefit of its investments is being felt through its advertising business, as it has integrated AI to improve functionality and ad-generation services.
However, the ad-tech gains haven't offset the massive costs because Meta is still working on its personal superintelligence model, which it believes will be the future, rather than the closed models offered by firms like OpenAI and Anthropic. Investors are still clamoring for a real payback, which may not materialize unless Meta can offer a subscription-based service for a product like the AI glasses it's developing.
Right now, all of Meta's AI investments may be yielding interesting and useful results, but they're not monetizable, which is frustrating the investing community. This has shown up in Meta's valuation, which is far cheaper than Apple's.
AAPL PE Ratio (Forward) data by YCharts
Meta is trading at half the P/E multiple Apple is, and that's because the market has seen weak returns from its AI investments. Apple is still trading at a huge premium because it hasn't dumped hundreds of billions of dollars into AI without anything to show for it. Instead, it hasn't spent a ton of money. The company is trailing its peers by choice, not accident.
If Meta can turn its AI fortunes around, it could be a generational buy at these levels; if it can't, the stock could easily move lower. Apple is priced far higher than its big tech peers, and there is some execution risk associated with that stock price. If it can develop a subscription AI model that has a large customer base, then this price tag could be worth paying. But with how expensive it is, I'd say its upside is capped.
There are many better AI investments than these two right now, but I would probably choose Meta if I were forced to pick one. It doesn't have anywhere to go but up, and Meta could be close to a breakthrough that vaults its AI platform to the top.
Ballentine Partners LLC trimmed its stake in Meta Platforms, Inc. (NASDAQ:META – Free Report) by 2.0% in the 2nd quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The institutional investor owned 56,286 shares of the social networking company’s stock after selling 1,164 shares during the period. Meta Platforms accounts for 0.4% of Ballentine Partners LLC’s portfolio, making the stock its 21st largest position. Ballentine Partners LLC’s holdings in Meta Platforms were worth $31,706,000 as of its most recent filing with the Securities and Exchange Commission.
Other institutional investors also recently added to or reduced their stakes in the company. InTrack Investment Management Inc raised its stake in Meta Platforms by 13.2% in the second quarter. InTrack Investment Management Inc now owns 6,151 shares of the social networking company’s stock valued at $3,465,000 after buying an additional 715 shares during the last quarter. O Connor Financial Group LLC lifted its stake in shares of Meta Platforms by 10.0% during the second quarter. O Connor Financial Group LLC now owns 826 shares of the social networking company’s stock worth $465,000 after buying an additional 75 shares during the period. Amplius Wealth Advisors LLC grew its holdings in shares of Meta Platforms by 41.2% during the second quarter. Amplius Wealth Advisors LLC now owns 1,976 shares of the social networking company’s stock valued at $1,113,000 after buying an additional 577 shares during the last quarter. Burton Enright Welch increased its position in shares of Meta Platforms by 19.5% in the 2nd quarter. Burton Enright Welch now owns 2,456 shares of the social networking company’s stock valued at $1,383,000 after acquiring an additional 400 shares during the period. Finally, Fifth Third Wealth Advisors LLC increased its position in shares of Meta Platforms by 1.4% in the 2nd quarter. Fifth Third Wealth Advisors LLC now owns 61,663 shares of the social networking company’s stock valued at $34,734,000 after acquiring an additional 861 shares during the period. Institutional investors own 79.91% of the company’s stock.
Meta Platforms Stock Performance NASDAQ META opened at $549.90 on Friday. The company has a debt-to-equity ratio of 0.32, a quick ratio of 2.23 and a current ratio of 2.23. The stock’s fifty day moving average is $593.51 and its two-hundred day moving average is $615.41. The firm has a market capitalization of $1.40 trillion, a P/E ratio of 20.71, a price-to-earnings-growth ratio of 0.93 and a beta of 1.25. Meta Platforms, Inc. has a fifty-two week low of $520.26 and a fifty-two week high of $790.80.
Meta Platforms (NASDAQ:META – Get Free Report) last issued its earnings results on Wednesday, July 29th. The social networking company reported $6.18 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $7.19 by ($1.01). Meta Platforms had a return on equity of 33.18% and a net margin of 29.83%.The company had revenue of $60.80 billion during the quarter, compared to analyst estimates of $60.22 billion. During the same period last year, the business earned $7.14 earnings per share. The firm’s revenue was up 28.0% compared to the same quarter last year. On average, research analysts anticipate that Meta Platforms, Inc. will post 28.5 earnings per share for the current year. Meta Platforms Dividend Announcement The company also recently declared a quarterly dividend, which was paid on Thursday, June 25th. Investors of record on Monday, June 15th were paid a dividend of $0.525 per share. This represents a $2.10 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date was Monday, June 15th. Meta Platforms’s dividend payout ratio (DPR) is currently 7.91%.
Trending Headlines about Meta Platforms Here are the key news stories impacting Meta Platforms this week:
Positive Sentiment: Meta launched Pocket in the U.S., an AI-powered app that lets users create and share interactive games through text prompts. The product could increase engagement and expand Meta’s consumer AI ecosystem. Meta brings Pocket to U.S. users Positive Sentiment: Meta introduced a Mac app for Meta AI with system-wide dictation and screen-aware assistance. The company is also pricing its new Muse Code coding agent below Anthropic and OpenAI offerings, potentially helping it attract developers and build AI adoption. Meta AI launches Mac app Positive Sentiment: Meta’s core advertising business remains strong, with quarterly revenue rising 28% year over year to $60.8 billion. AI-related improvements to recommendations and ad delivery are supporting engagement, clicks and conversion efficiency. Meta drawdown analysis Neutral Sentiment: Meta is contesting the Federal Trade Commission’s effort to revive monopoly charges. The company argues that Facebook and Instagram users increasingly see recommended content rather than posts from friends, a defense that could influence the case’s regulatory implications. Meta fights FTC monopoly charges Neutral Sentiment: Meta’s CTO Andrew Bosworth, CFO Susan Li and insider Curtis Mahoney sold shares worth roughly $10.3 million in aggregate under pre-arranged Rule 10b5-1 plans. The transactions are limited as discretionary signals but may still affect investor sentiment. Meta insider transaction filing Negative Sentiment: Child-safety and social-media addiction litigation is intensifying. Testimony alleging that some safety tools were “designed to fail” raises the possibility of major damages, mandated product changes, restrictions on engagement features and pressure on advertising monetization. Meta social media lawsuit trial Negative Sentiment: Investors remain concerned that heavier AI capital spending will depress second-half free cash flow and increase financial pressure. Those concerns follow Meta’s quarterly EPS miss, despite its revenue beat, and have contributed to the stock’s year-to-date weakness. Meta stock investment analysis Analysts Set New Price Targets Several analysts recently commented on META shares. Robert W. Baird dropped their target price on Meta Platforms from $830.00 to $750.00 and set an “outperform” rating on the stock in a report on Thursday, July 30th. Truist Financial dropped their price objective on shares of Meta Platforms from $840.00 to $770.00 and set a “buy” rating on the stock in a research note on Thursday, July 30th. Royal Bank Of Canada reaffirmed an “outperform” rating and set a $810.00 target price on shares of Meta Platforms in a report on Monday, June 1st. Susquehanna decreased their target price on shares of Meta Platforms from $900.00 to $650.00 and set a “positive” rating for the company in a research note on Thursday, July 30th. Finally, Roth Capital reissued a “buy” rating on shares of Meta Platforms in a report on Thursday, April 30th. Four analysts have rated the stock with a Strong Buy rating, thirty-five have given a Buy rating and eight have assigned a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus price target of $785.32.
Check Out Our Latest Report on Meta Platforms
Insider Buying and Selling at Meta Platforms In other Meta Platforms news, COO Javier Olivan sold 3,348 shares of the stock in a transaction that occurred on Monday, July 6th. The stock was sold at an average price of $600.97, for a total transaction of $2,012,047.56. Following the completion of the sale, the chief operating officer directly owned 9,498 shares of the company’s stock, valued at approximately $5,708,013.06. This trade represents a 26.06% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Susan J. Li sold 9,196 shares of the business’s stock in a transaction dated Tuesday, August 18th. The stock was sold at an average price of $550.61, for a total transaction of $5,063,409.56. Following the transaction, the chief financial officer owned 13,186 shares in the company, valued at approximately $7,260,343.46. This trade represents a 41.09% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 38,502 shares of company stock valued at $22,603,485. Insiders own 13.53% of the company’s stock.
Meta Platforms Profile (Free Report)
Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.
Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.
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Meta Platforms (META) "is turning into one of our favorite names," says CFRA's Angelo Zino, who says the core business and growth prospects both appear healthy. The cheapest valuation among the Mag 7 and new products are other key factors he sees buoying the social media giant.
Meta is facing what could be its most consequential trial yet, as 29 state attorneys general accuse the tech giant of knowingly designing Facebook and Instagram to addict children and misleading the public about the risks. The states are seeking civil penalties that could approach $200 billion and changes to core features like infinite scroll and autoplay, while Meta says the claims are unsubstantiated and that it has built strong protections for teens.
It's been a crazy four months for Yvonne Gonzalez Rogers.
The judge in the Northern District of California spent late April and much of May in her downtown Oakland courtroom, overseeing the high-profile battle between Elon Musk and Sam Altman.
Now, the 61-year-old Gonzalez Rogers is gearing up for week two of a trial that could go a long way in determining the fate of Meta's advertising business, as California Attorney General Rob Bonta leads a coalition of state AGs in litigating what's being hailed as social media's "Big Tobacco moment."
In between the two trials, Gonzalez Rogers was named chief judge of the court, 15 years after being nominated to serve there by then-President Barack Obama. She replaced Judge Richard Seeborg, who held the role for five years, and takes over at a time when tech companies are bigger and more powerful than ever and artificial intelligence is driving more high-stakes fights into the courtroom.
The district includes San Francisco, where OpenAI is headquartered, as well as all of Silicon Valley, home to Meta and most of its technology peers. For Gonzalez Rogers, the job is the capstone of a 35-year legal career in California, where she began in private practice before being appointed to the Alameda County Superior Court in 2008 by then-Gov. Arnold Schwarzenegger.
Known to many as YGR, Gonzalez Rogers has developed a reputation for her no-nonsense attitude.
"I would describe her as a pistol," said Steve Berman, a managing partner at Hagens Berman who served as co-lead counsel against Big Tobacco in the 1990s and has litigated against Apple before Gonzalez Rogers in several cases. "If lawyers give her bulls---, she just goes after them."
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A native of Houston, Gonzalez Rogers did her undergraduate work at Princeton and received her law degree from the University of Texas. She then joined law firm Cooley in 1991, becoming the firm's first Latina associate.
During her time as a state judge, she caught the attention of then-Sen. Dianne Feinstein, a California Democrat. Feinstein, who died in 2023, later recommended Gonzalez Rogers' nomination to the federal bench to President Obama.
History with AppleBefore the recent cases involving Meta and Musk, Gonzalez Rogers was well known by those who follow Apple.
In 2012, she inherited Pepper v. Apple, an early antitrust challenge to the App Store. IPhone owners alleged Apple forced them to buy apps through its store alone, allowing the company to charge a 30% commission and push prices higher. Gonzalez Rogers initially dismissed the case, though the Supreme Court later took it up and ruled that consumers could sue the company.
Around the same time, Gonzalez Rogers oversaw an antitrust case, involving allegations that Apple unfairly blocked users from playing music from sources other than iTunes and shut out competitors. Apple was victorious.
But her most notable Apple trial took place five years ago, in a case against Epic Games.
In 2020, Epic activated its own payment option inside Fortnite, bypassing Apple's payment system and its 30% commission. Epic sued Apple after the iPhone maker removed Fortnite from the App Store, accusing the company of illegally controlling the way apps were distributed and payments were processed on iPhones.
After a three-week bench trial in 2021, Gonzalez Rogers largely sided with Apple, finding that Epic had failed to prove Apple was an illegal monopolist. She also determined that Apple's "anti-steering" rules violated California competition law and ordered the company to allow developers to direct users to outside payment options.
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But that wasn't the end of it.
Last year, Gonzalez Rogers said Apple willfully violated the injunction, writing in a court filing that the company's vice president of finance "outright lied" to the court about when the company had decided to levy a 27% fee on some purchases linked to its App Store.
"Neither Apple, nor its counsel, corrected the, now obvious, lies," Rogers wrote, saying that she considers Apple to "to have adopted the lies and misrepresentations to this Court."
Rogers referred the matter to U.S. attorneys to investigate whether to pursue criminal contempt proceedings, though a prosecution never emerged.
Musk v. AltmanGonzalez Rogers was back in the spotlight earlier this year, as Musk and Altman took their long-standing feud to the courtroom.
In 2024, Musk sued Altman, OpenAI and fellow co-founder Greg Brockman for allegedly "stealing a charity." After a three-week trial, the advisory jury ruled that Musk, who helped start OpenAI as a nonprofit in 2015, hadn't filed his suit in time, ending the case without resolving Musk's allegations.
Musk called the verdict a "technicality" and vowed to appeal, but Gonzalez Rogers said, in wrapping up the trial, that there's "a substantial amount of evidence to support the jury's finding."
A spokesperson for Gonzalez Rogers told CNBC that the judge gives jurors a pocket constitution from the Supreme Court bookstore with a signed thank you note for their service.
Like in the Musk-Altman case, Gonzalez Rogers is presiding over a bench trial as the state AGs take on Meta. An advisory jury will hear the evidence and reach a verdict, but the decision isn't legally binding, and Gonzalez Rogers retains the final say.
Steven Baicker-McKee, a law professor at Duquesne University and an expert in civil procedure, told CNBC that an advisory jury amounts to an add-on to a bench trial.
"You only get an advisory jury where the parties do not have a right to a jury, and the judge could decide the matter on his or her own," said Baicker-McKee. "An advisory jury allows the judge to gauge how the community feels about a certain event or certain conduct."
Here's how Gonzalez Rogers described it in a court filing:
"The issues at play in this impact the daily lives of the public across the states involved," she wrote. "Thus, the Court deems it prudent to call an advisory jury to solicit the 'standard of the community.'"
As far as the potential impact of Gonzalez Rogers' ultimate decision, this could be her most important case yet.
Meta has estimated that potential penalties from the states' lawsuit could be as high as $1.4 trillion, though Bonta says the states are not demanding that much.
Money isn't Meta's biggest concern.
Read more CNBC tech newsMarvell pops on AI chip deal that lets Google buy up to $12.2 billion in sharesNvidia plays matchmaker in Nordics, sources tell CNBC, as AI data center deals boom in regionThe U.S. banned Nvidia's best chips from going to China. Now it's trying to close a crucial loopholeAmazon to expand drone service to nearly 500 cities after targeting 1 million deliveries this yearThe states allege Meta deliberately used features including infinite scroll, autoplay, likes, push notifications and disappearing content to hook young users on its apps despite knowing of the vulnerabilities. They also accuse Meta of collecting information from children without parental consent and misleading the public about the risks of its platforms. Meta has denied the claims.
Bonta and AGs from Colorado, New Jersey and Kentucky are co-leading the trial and represent a bipartisan group of 29 AGs seeking algorithm alterations that could force Meta to change how it designs and operates features for young users on Facebook and Instagram. Meta is reliant on its algorithms to target advertising, which accounts for 98% of its revenue and is the key source of growth as the company heavily invests in AI.
Opening arguments began on Tuesday, and Bonta reminded reporters after the first day that the trial centers around "civil penalties, restitution and distortion," and is not primarily about money.
The trial in Gonzalez Rogers' courtroom is expected to last six to seven weeks. It's the centerpiece of a larger judicial assignment.
Gonzalez Rogers is overseeing the broader multidistrict litigation consolidating nearly 3,000 pending lawsuits against Meta, TikTok, Snap and YouTube over alleged harms to children and teens.
"She's super smart, and I think thrives on challenging cases," Berman said. "I haven't always agreed with her in cases I didn't win. But I know that she's smart."
— CNBC's Jonathan Vanian, Lora Kolodny and Kif Leswing contributed to this report.
WATCH: Meta is facing its biggest trial yet, and its future hangs in the balance
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Meta’s business can be boiled down to four words that begin with the letter H: hook, hold, harvest, hide, according to a lawyer who is prosecuting the world’s largest social media company.
The owner of Facebook and Instagram “hooks” in users, “holds” them on its platforms for as long as possible, “harvests” their data and then “hides” the truth from the public, she argued.
“Meta’s business model worked especially well for kids,” said Megan O’Neill, a lawyer for the state of California.
Her accusation opened the blockbuster trial against the US tech company on Tuesday in Oakland, California, just north of Meta’s headquarters in Silicon Valley. California has joined 28 other US states in suing the £1tn ($1.36tn) company for allegedly designing addictive products that lead to children being harmed.
Lennon Torres of Heat Initiative holds a banner with the names of young people who died as a result of social media outside the Ronald V Dellums federal building on 18 August. Photograph: Noah Berger/APEight jurors heard from O’Neill and attorneys for Meta this week, along with testimony from former employees and a psychologist. The lawsuit centers on allegations that the company violated US federal child privacy laws and state-level consumer protection laws by collecting data on children under the age of 13 without parental permission. Over the course of the trial, the jury is additionally expected to hear from Meta CEO Mark Zuckerberg and Instagram CEO Adam Mosseri.
The threat to Meta is existential. If the company is found liable, damages could be as high as $200bn – an amount equivalent to the company’s 2025 annual revenue. The states are also asking that Meta be forced to change the design of its products to make them safer for children, which could have permanent effects on the company’s business model and how its social media platforms operate.
Meta has denied all allegations. Liza Crenshaw, a spokesperson for the company, said: “Rather than sticking to the facts or the law, the states have instead decided to chase an outlandish payout.”
During opening statements, Paul Schmidt, an attorney for Meta, said there is “no dispute” people can struggle with social media, but that Meta had “come up with tools to try and address that”. He added the company does not allow children under the age of 13 to register for accounts on its social networks and that it had disabled more than 1m accounts of those young users.
Paul Schmidt, lead attorney for Meta, leaves the courthouse as Meta is on trial over social media addiction in Oakland on 19 August. Photograph: Karl Mondon/AFP/Getty ImagesThe trial is expected to last six to eight weeks. The proceedings will be led by attorneys for the states of California, Colorado, Kentucky and New Jersey. The jury’s role is advisory, which means they will give recommendations to the presiding judge, Judge Yvonne Gonzalez Rogers, who will make the final decision on the verdict and damages.
Meta faces thousands of similar US lawsuits brought by families, school districts and other attorneys general. The company lost the first two of those cases to go to trial in March. In the first, the company was ordered to pay nearly $1bn to the state of New Mexico for allowing child sexual exploitation on its platforms; and in the second, it was found liable for deliberately designing addictive products that hooked one young woman and was ordered to pay her more than $4m.
The star witness to take the stand in the trial’s first week was Arturo Béjar, a safety engineer at Meta who worked there in two separate stints between 2009 and 2021. Since leaving, Béjar has been an outspoken critic of the company, testifying before a US Senate committee and serving as an expert witness in other cases that involve social media’s harm to children.
In Oakland, Béjar testified that his motivation for pursuing solutions for harms to children was his own teenage daughter’s treatment on Instagram. He said she received unwanted sexual advances and photos of male genitals as well as misogynistic insults. Later, she told her father that reporting these abuses through Instagram’s established processes was either ineffective or not possible.
“Meta is taking a ‘don’t ask, don’t tell’ strategy” when it comes to child safety, Béjar testified.
Arturo Bejar, a former Meta safety engineer and consultant, leaves the courthouse as Meta faces trial over claims that they illegally collected and used children’s data. Photograph: Manuel Orbegozo/ReutersBéjar said that his job often included briefing Zuckerberg and that he had spoken with the CEO more than 100 times in the course of his work.
During Béjar’s testimony, attorneys for the government showed the jury an email he sent Zuckerberg in 2021, which outlined a survey he had conducted of teens’ experiences on Instagram. The results showed 51% of users said “yes” to having bad or harmful experiences within the previous seven days and that content was taken down only 0.02% of the time.
Béjar testified he sent that data to Zuckerberg because, “in my experience, when Mark makes something a priority, mountains move.”
“Did he ever respond to you?” the attorney asked.
“No,” Béjar replied. “I didn’t hear back from him.”
Meta fought to bar Béjar from testifying at the trial, filing a series of motions to strike his exhibits and prevent him from taking the stand, all of which were rejected. In an email to reporters on Wednesday, Meta continued to hound him. The company’s statement said Béjar’s testimony was not credible or reliable because he overinflated his role at the company and took credit for work he didn’t do.
After Béjar’s testimony wrapped, the jury heard recorded depositions from Elena Davis and Natalie Troxel – both former user experience researchers for Meta. Jean Twenge, a psychology professor at San Diego State University, also briefly took the stand, with testimony scheduled to continue next week.
As the founder of Appaloosa Management, David Tepper built his reputation through a keen eye for distressed assets, including debt instruments trading at steep discounts, and deep-value stocks that most other investors overlooked amid temporary turmoil.
Tepper's willingness to embrace situations that others flee has helped him produce outsized returns over the long run. This makes his latest combination of bets between CoreWeave (CRWV -2.13%) and Meta Platforms (META +0.75%) particularly noteworthy for investors tracking the artificial intelligence (AI) infrastructure supercycle.
Image source: The Motley Fool.
The rise of neoclouds Recent 13F filings show that Appaloosa initiated a position in CoreWeave stock during the second quarter, acquiring 1,078,248 shares. CoreWeave operates as a neocloud provider, delivering high-performance GPU capacity tailored to AI workloads. In an environment where hyperscalers are struggling to meet explosive AI-driven demand for training and inference deployments, neoclouds like CoreWeave bridge the gap by offering dedicated, scalable compute infrastructure optimized for Nvidia hardware and adjacent systems.
During the second quarter, CoreWeave's backlog grew by more than 246% year over year to $104 billion. Of note, this figure does not include new commitments of $25 billion signed shortly after the quarter ended. CoreWeave's customers include frontier AI labs, hyperscalers, and an expanding roster of enterprises. Revenue more than doubled year over year, reflecting the pace of rapid capacity deployment.
With that said, the company's balance sheet reveals a potential blemish that has left some on Wall Street uneasy. CoreWeave's total debt -- including operating leases -- stands north of $50 billion.
CRWV Total Long Term Debt (Quarterly) data by YCharts.
This capital from its debt sales is being used to finance the capital expenditures of its aggressive data center build-out. However, the company's leverage profile raises questions about possible refinancing needs in a higher-interest-rate environment. The combination of heavy borrowing and pressures to free cash flow has some investors concerned about the company's execution risks.
Why Tepper's Meta position looks interesting During the second quarter, Appaloosa also increased its stake in Meta Platforms by 55%, adding 238,500 shares. This move looks particularly interesting because Meta is reportedly exploring the idea of leasing some of its excess AI compute capacity to third parties. This strategy could place the social media giant and hyperscaler in direct competition with neocloud operators such as CoreWeave.
While details remain sparse, that new revenue stream could help offset the costs that Meta is incurring to expand its data center footprint. What's even more interesting is contemplating the prospect of a well-capitalized CoreWeave customer -- Meta -- turning into one of CoreWeave's rivals.
The natural thought is that if hyperscalers start to fill more of the cloud capacity demand that they have previously outsourced to neoclouds, it could shrink the addressable market for those pure-play neocloud providers. Against this backdrop, Tepper's simultaneous commitments to both Meta and CoreWeave stand out against the potential friction.
Today's Change
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4.07
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How should investors view Tepper's positioning? In my view, Tepper has built a unique hedge within the neocloud space by pairing his Meta and CoreWeave positions. Valuation analysis suggests that both companies can be viewed through a similar lens. Over the last several months, the forward price-to-sales (P/S) multiples of Meta and CoreWeave both compressed. Of note, Meta is also trading at a discount to its recent levels on a forward earnings basis.
CRWV PE Ratio (Forward) data by YCharts.
These trends could suggest that the market is already factoring much of CoreWeave's leverage risk into the share price while remaining skeptical over Meta's elevated capital outlays. I find downward pressure on both stocks interesting, as each company has consistently demonstrated robust growth throughout the AI boom.
Through his positions in CoreWeave and Meta, Tepper gains exposure to a market leader in the specialized neocloud landscape alongside a technology blue chip that is building a more three-dimensional AI ecosystem.
Whether this structure proves profitable will hinge on the companies' execution and the persistence of compute scarcity. If CoreWeave's remaining performance obligations (RPO) convert at a pace that allows it to retire debt at a meaningful pace, this position could bring asymmetric gains. At the same time, Meta's scale and diversification beyond advertising offer some balance should the valuations of pure-play neoclouds experience more pressure.
Tepper's track record of taking advantage of undervalued opportunities supports his strategy with this pairing, reflecting calculated opportunism rather than simple momentum chasing. In the long run, Appaloosa should be positioned to benefit regardless of how the competitive dynamics in the AI infrastructure space ultimately play out.
, the social-media and artificial-intelligence juggernaut, climbed approximately 0.6% to $549.33 Friday morning as mega-cap growth stocks fought back. But Meta's rebound comes with a legal grenade still rolling across the floor. Investors must weigh a roaring advertising business against a youth-safety trial that could force painful changes to its biggest platforms.
Twenty-nine states are challenging Meta over children's data and allegedly addictive product features. The possible penalty has been estimated at approximately $200 billion, according to Reuters. Meanwhile, the money machine keeps humming. Second-quarter revenue exploded 28% to $60.8 billion. The ugly number was free cash flow, which crashed 91% to only $784 million as Meta opened the spending floodgates for AI.
A massive fine would sting. A forced redesign of recommendations, infinite scroll or youth engagement could hurt far more because it would strike directly at Meta's advertising engine. Yet the stock sits 34.64% below its GF Value estimate of $840.41. That is a monster valuation gap—but investors are being paid to absorb monster-sized legal risk and an AI spending spree that is devouring cash.
Meta Platforms Inc. (META, Financials), the parent of Facebook and Instagram, continues to spend aggressively on artificial intelligence, but Bernstein thinks investors may be looking too much at the expense and not enough at what could go right.
Analyst Mark Shmulik maintained an Outperform rating and $800 price target, saying Meta's core business is still robust enough to support the AI drive. Revenue is still growing roughly 28% year over year, with early evidence of AI monetization starting to come in business messaging, paid model APIs and subscriptions.
That matters because Meta doesn't need every AI project to be a big moneymaker. Bernstein, however, believes that one good consumer AI success may do a lot to improve mood among investors and make today's spending look a lot more justified.
There is still a lot of execution risk. Meta is likely to continue heavy expenditure on AI models, personnel and infrastructure at least through 2027. But the valuation is helping.
Bernstein thinks the stock already represents much of the uncertainties around that investment, at about 15 times next year's earnings. The scenario for investors is really simple: Meta's primary advertising engine is still growing rapidly, and the business is starting to show that AI might someday lead to new sources of income, not just a cost center.
Meta is facing a landmark legal battle with 29 states accusing the company of deliberately designing its platforms to keep children hooked while misleading the public about their safety. George Washington University law professor Mary Anne Franks explains the state and federal claims, why the case has drawn comparisons to tobacco litigation, and why the biggest consequence may not be the potential financial penalty, but what internal documents reveal about what Meta knew and when.
An issue that reared its ugly head in Meta Platforms' NASDAQ: META Q2 earnings report does not appear to be going away and could intensify significantly. Meta's Q2 report highlighted several investor concerns, with legal expenses among the most prominent.
This report is from this week's The Tech Download newsletter. Like what you see? You can subscribe here.
Meta says it faces a trillion-dollar penalty and damage to its advertising model. But the trial could go well beyond one company. It could make social media unrecognizable.
The states want the court to force Meta to remove "certain addictive design features" from its platforms, Instagram and Facebook. These include infinite scrolling, autoplaying videos, disappearing content such as Instagram Stories, beauty filters, and algorithm-dominated feeds.
During her opening statements on Tuesday, California's deputy attorney general, Megan O'Neill, said that Meta is choosing profit over safety, hiding the "reality" of under-13s on its platforms, and that its business model is to "hook the users, hold them for as long as they can, harvest their data, and then hide the truth from the public."
"This trial is potentially the end of social media as we know it," Kate Winick, a principal analyst at Forrester, said.
"Any verdict against Meta would set a massive precedent," Winick added. "These trials are often compared to the Big Tobacco lawsuits of the 90s, and the outcome will likely be analogous as well: the product is going to be harder for young people to access and the cultural message around social media is going to change."
And California Attorney General Rob Bonta said Meta is just the "first in line," as various U.S. state attorneys general take social-media companies to court over harms. There are pending lawsuits against YouTube and Snap too.
"Who goes first? Who goes last? Ideally, they all go at the same time," Bonta said. "That's not possible. In an ideal world, they would all commit to the same reforms and changes to all kids and keep them safe."
watch now
Meta and YouTube were already found negligent in a blockbuster social media addiction trial in Los Angeles in March, in which the plaintiff was a young woman who said she became addicted to their apps as a child. She said the platforms' design caused her severe body dysmorphia, depression and suicidal thoughts.
Winick predicted that other social media platforms like Snap, which has a younger user base, would likely make "preemptive changes" to align with any changes forced on Meta by the trial.
"It's unlikely that this will permanently kill the industry, but it will significantly reduce usage over the long term as young users fail to be introduced to the platforms," she added.
"The real existential threat to Meta and social media as an industry is if similar lawsuits follow from adults alleging the same problems and effects," Winick said.
News editOpenAI rolls out ChatGPT for Teens, a dedicated chatbot experience for users under 18 that has "stronger built-in safety protections."
Alibaba's AI spending spree drove a 75% drop in net income for the June quarter.
OpenAI's chief financial officer told employees that the company will go public by 2027 if not sooner.
Amazon plans to offer drone deliveries in nearly 500 U.S. cities and towns by the end of the year.
AI data center outrage is showing up everywhere from ads to elections, as the facilities have become a physical manifestation of the widespread antipathy for AI.
One more thingNvidia is playing matchmaker, trying to connect companies with its graphics processing units to data-center operators that have the capacity to deploy them in the Nordics, sources told CNBC's Kai Nicol-Schwarz.
It comes as the chip giant attempts to expand its influence over the AI ecosystem in the race to build out infrastructure.
Two sources familiar with the matter said Nvidia has offered to connect Nordic data center operators with companies using its GPUs that are seeking additional capacity.
Meta Platforms innovates with memory reuse, deploying CXL to recycle DDR4 in DDR5 servers. Rising DRAM prices and memory's significant share of server TCO drive META's creative hardware strategies, boosting efficiency and cost savings at scale. Management should do a better job explaining how server depreciation schedules for different types of machines condense down to a single line in 10-K filings.
Former employee testimony sharpened the legal threat surrounding Facebook and Instagram's design, data collection and recommendation systems. Summary
A court-ordered platform redesign could matter more than the eventual financial penalty.
Meta Platforms META, the social-media, digital-advertising and artificial-intelligence powerhouse, slipped approximately 0.4% to $543.865 Thursday afternoon as its blockbuster youth-safety trial moved into testimony. Twenty-nine states accuse Meta of illegally collecting children's data and engineering Facebook and Instagram to keep younger users glued to their screens.
The testimony landed hard. Former Meta safety engineer Arturo Béjar said child protection repeatedly took a back seat to engagement, according to The Guardian. Meta denies wrongdoing and points to age restrictions, parental controls and expanded safeguards. The numbers are staggering: the states see roughly $200 billion as a more realistic penalty, while Meta says theoretical exposure could soar to $1.4 trillion.
But the scariest outcome is not a gigantic check. A judge could force Meta to weaken infinite scroll, tighten recommendation systems or rebuild the addictive machinery powering its advertising empire. Second-quarter revenue exploded 28% to $60.8 billion, yet costs jumped 55%.
The stock now trades 35.25% below its $839.91 GF Value estimate—a massive valuation gap that screams upside if Meta survives the legal storm without sacrificing engagement or crushing margins.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
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Getty Images; Tyler Le/BI Meta's new vibe-coding social app, Pocket, is officially here.
"We're starting to roll out Pocket, a new app that turns your ideas into interactive creations you can play with and share right from your phone," a Meta spokesperson told Business Insider.
Pocket, which quietly launched as a test in July, is a social feed that lets users turn text prompts into interactive media. Think mini games and quirky memes.
The app was developed by the team behind Gizmo, a similar app from Atma Sciences Inc., which was founded by ex-Snapchat staffers. Business Insider scooped in March that Meta hired the Atma Sciences team and acquired a non-exclusive license to its technology.
Posts on Pocket are called "gizmos." Screenshot/Meta Pocket and Gizmo are pretty much identical app experiences. Atma Sciences announced on Thursday that it is shutting down the original Gizmo app.
Other startups, like Sekai and Wabi, are also taking a stab at turning vibe coding into a social experience, and investors are taking note. Then there are creators who are carving out a niche by turning interactive mini apps into viral content.
How Meta's vibe-coding app worksYou open Pocket to a vertical feed. Instead of scrolling past pictures or videos, you scroll through posts called "gizmos." You can interact with these posts by dragging, drawing, or tapping on the screen. There are comments, likes, and reposts. You can't DM, but you can share links to gizmos.
To make a gizmo, all you have to do is type up a prompt. For instance, I prompted: An old desktop computer where when I click on the screen, this image appears. (It's a meme.) Within seconds, Meta's Pocket app created an interactive post.
Here's the gizmo I made, including a meme I uploaded. Screenrecording/Meta/BI There, I did it! I vibe coded!
If the output isn't exactly what you dreamed up, you can tweak it. Pocket lets you fine-tune the prompt, adjust the visuals, and add music. And if you like someone else's gizmo, you can remix it with your own twist.
Pocket runs on Meta's Muse Spark model, developed by Meta Superintelligence Labs.
Meta doesn't have plans to integrate Pocket with other apps, like Instagram, at the moment, the spokesperson told Business Insider.
That could be fun, though.
Meta's 'family' of apps is getting biggerPocket is one of Meta's latest stand-alone apps. The company appears to be ramping up its strategy of launching new apps, since reaping benefits from the success of Threads, its X (formerly Twitter) competitor.
Other apps Meta has launched recently include:
Instants (similar to Snapchat)Forum (a new app for Facebook groups)Creator Studio (a separate app for content creators)New apps mean new places to unlock advertising.
I didn't spot any ads on the nascent Pocket app — but I can see a potential future with interactive advertisements from brands or sponsored content from creators.
Read next
Sydney Bradley You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Sydney Bradley has been covering media and tech for Business Insider since 2020. She breaks news and writes extensively about Instagram and Facebook, as well as new social media startups, dating apps, the creator economy, venture capital, and tech culture.She regularly contributes to BI's "After Hours" series, where our reporters dive into the social scenes shaping tech, media, and finance.Sydney's reporting on Instagram was nominated as a finalist for the 2021 Los Angeles Press Club National Entertainment Journalism Awards.She graduated from the University of Virginia with a degree in American Studies. You can follow Sydney's work on LinkedIn, Twitter, and Instagram at @sydneykbradley.Have a tip? You can also contact her via encrypted messaging app Signal (@sydneykbradley.123), encrypted email ([email protected]), or standard email ([email protected]). Use a personal email address, a nonwork WiFi network, and a nonwork device; here’s our guide to sharing information securely.
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Journalist Alex Heath, co-founder of the Sources newsletter and a longtime Meta chronicler, argued on CNBC this morning that investors are underestimating how close Meta Platforms (NASDAQ:META | META Price Prediction) is to shipping frontier-class AI models. His reporting, drawn from a recent conversation with CEO Mark Zuckerberg, reframes the debate around Meta’s aggressive capital spending at a moment when the stock is under pressure.
Heath said Zuckerberg told him the reason he published his recent AI policy op-ed was to establish his values before Meta unveils more powerful AI models: “He told me… that the reason he wrote that is he wanted to state the values he has before Meta releases much more capable models in the near future.“
Heath interprets that framing as a strategic signal about Meta’s direction. “That, to me, was a pretty definitive statement that he thinks that’s going to happen in the near future, and you’ve seen them catch up pretty quickly over the last year.”
Why Investors Are Punishing Meta’s $145 Billion AI Bet Meta shares currently trade around $546.35 as of this morning, with the stock down 15.46% over the past month and 17.14% year to date. The pullback followed a Q2 2026 earnings report with higher-than-expected capex costs.
Q2 capital expenditures were $31.1 billion, and management raised the 2026 capex outlook to $130-$145 billion. Total 2026 expenses are guided to $165 to $169 billion. Free cash flow fell to just $784 million in the quarter, a figure that has fueled Reddit debates.
Q2 revenue reached $60.8 billion, up 28%, but GAAP operating margin compressed to 31%, and diluted EPS of $6.18 came in below Street consensus. A widely shared post argued investors were looking at the wrong number, noting that operating cash flow still grew 25%.
What All That Capex Spending May Actually Be Buying What, specifically, is all this spending buying? On the Q2 call, Zuckerberg defended proprietary model development directly. “Right now, the open source models are not as strong as the frontier models,” he said, adding that “having kind of sovereignty over building your own models is going to be an important part of that stack going forward.”
Zuckerberg also said Meta is “in the process of scaling much larger and more advanced models” beyond the early scaling ladder of MuseSpark 1.1 and related releases. He argued the real prize is a significantly higher margin on selling intelligence rather than selling compute directly.
What to Watch Next Meta still needs to prove that its unprecedented AI spending can produce frontier models and attractive financial returns. Zuckerberg’s comments offer no firm timeline, but they suggest the company may be closer to a breakthrough than investors realize.
With Meta trading at 19 times forward earnings after a 17% year-to-date decline, any convincing model announcement at September’s Connect event on September 23 could quickly change the narrative. Analysts have an average price target of $754.14, with 47 Buy and 8 Strong Buy ratings against 7 Hold calls.
Contact [email protected] for any questions or corrections.
Item 1 of 3 Strancally Castle, that was recently bought by Meta CEO Mark Zuckerberg, in Waterford, Ireland, August 20, 2026. Patrick Kenealy/Handout via REUTERS
[1/3]Strancally Castle, that was recently bought by Meta CEO Mark Zuckerberg, in Waterford, Ireland, August 20, 2026. Patrick Kenealy/Handout via REUTERS Purchase Licensing Rights, opens new tab
DUBLIN, Aug 20 (Reuters) - Meta CEO Mark Zuckerberg has bought a 19th-century Gothic-style castle overlooking a river in the southeast of Ireland, 200 kilometres (125 miles) from his company's European headquarters, a spokesman said on Thursday.
Strancally Castle was built around 1830 on land overlooking the River Blackwater and underwent extensive renovation in 2003, according to a state architectural archive.
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The transaction is not listed on the Irish state property price register. The Irish Times, which first reported the purchase, estimated the property might be worth between €20 million and €30 million.
A spokesman for Zuckerberg said he and his family were "excited to continue caring for this historic home and look forward to spending time in Ireland."
Meta employs around 1,500 people in Ireland, where a number of U.S. tech multinationals have their European headquarters, in part due to the country's favourable tax regime.
Reporting by Conor Humphries; editing by William James
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Meta’s experimental vibe-coding gaming app, Pocket, is now rolling out to everyone in the U.S. The app, which arrived quietly last month in the test market of Brazil, allows people to generate small, interactive games using AI prompts, which are published to a scrollable feed.
Based on Meta’s acqui-hire of the team at the vibe-coded gaming platform Gizmo earlier this year, these games — or “gizmos” as they’re called — respond to touch and the tilt of your phone, play sound effects, and can include clips of your favorite songs.
They can also use photos from your camera roll or access your camera. The resulting games can then be shared on your profile, where others can save them, remix them into other creations, or simply repost them.
Pocket.Image Credits:Meta The app is the latest example of Meta’s push to make AI-creation tools mainstream, following its earlier efforts that included making AI-generated images with its Meta AI app and creating AI videos with an experimental app called Vibes.
Pocket now joins these and several other stand-alone mobile applications from Meta in recent months. CEO Mark Zuckerberg has credited the increased output to AI-enabled software development, which makes it faster for the company to test and ship new ideas.
“Earlier this year, we shipped Instagram Instants. We also just launched Forum, a stand-alone Groups app, and Seller, a stand-alone Marketplace app. I expect it to become a lot easier to ship new apps,” he told analysts on July’s earnings call. “So we are planning to build out more ideas and use our recommendation systems to scale them.”
In addition to Instants, Forum, and the Seller app, Meta has shipped an experiment involving AI bedtime stories, and this week, a Meta AI app for Mac.
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Sarah has worked as a reporter for TechCrunch since August 2011. She joined the company after having previously spent over three years at ReadWriteWeb. Prior to her work as a reporter, Sarah worked in I.T. across a number of industries, including banking, retail and software.
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Meta Platforms (META) could generate additional revenue from surplus artificial intelligence computing capacity, helping support the company's heavy infrastruct
Image Credits:picture alliance / Contributor (opens in a new window) / Getty Images Meta today announced a new Mac app for Meta AI with built-in system-wide dictation. The app can also look at the current screen and answer your questions based on the context using its Muse Spark model.
The company said that the dictation feature works across all apps, just like other tools such as Wispr Flow, Superwhisper, and Monologue. Last month, Google also updated its Gemini app for Mac to enable a system-wide dictation feature.
The Mac app release is part of a Meta AI update for business owners. The company said that merchants can connect their Instagram and Facebook accounts, Meta ad campaigns, and Google Workspace (Gmail, Docs, Sheets, and Slides) accounts to Meta AI, and get insights by asking queries to the AI assistant.
Meta AI can provide users with information about campaign performance and audience engagement metrics to understand what posts have worked well. It added that users can also access intelligence on competitors based on publicly available data.
With the new Meta AI integration with business tools, the AI assistant can create proposal decks, draft documents, and spreadsheets.
Meta has increasingly focused on making its AI tools available to businesses for automated customer support and inquiries across its apps, including WhatsApp and Instagram. During the company’s Q2 2026 earnings call, CEO Mark Zuckerberg said that there is a big opportunity to sell agents to businesses and automate work on their behalf.
Crossmark Global Holdings Inc. lessened its holdings in Meta Platforms, Inc. (NASDAQ:META – Free Report) by 3.0% in the second quarter, according to the company in its most recent Form 13F filing with the SEC. The firm owned 119,765 shares of the social networking company’s stock after selling 3,717 shares during the quarter. Meta Platforms accounts for approximately 0.9% of Crossmark Global Holdings Inc.’s investment portfolio, making the stock its 14th biggest position. Crossmark Global Holdings Inc.’s holdings in Meta Platforms were worth $67,462,000 at the end of the most recent quarter.
A number of other hedge funds have also bought and sold shares of META. Ashton Thomas Securities LLC increased its stake in shares of Meta Platforms by 17.4% in the 1st quarter. Ashton Thomas Securities LLC now owns 18,000 shares of the social networking company’s stock valued at $10,299,000 after acquiring an additional 2,670 shares in the last quarter. Keybank National Association OH boosted its stake in Meta Platforms by 15.7% during the fourth quarter. Keybank National Association OH now owns 133,798 shares of the social networking company’s stock worth $88,319,000 after acquiring an additional 18,169 shares in the last quarter. WMS Group LLC acquired a new stake in Meta Platforms in the fourth quarter worth $876,000. Consolidated Investment Group LLC increased its stake in Meta Platforms by 61.2% in the fourth quarter. Consolidated Investment Group LLC now owns 7,900 shares of the social networking company’s stock valued at $5,215,000 after purchasing an additional 3,000 shares in the last quarter. Finally, Vanguard Group Inc. raised its holdings in shares of Meta Platforms by 3.8% during the fourth quarter. Vanguard Group Inc. now owns 199,995,630 shares of the social networking company’s stock valued at $132,015,115,000 after purchasing an additional 7,269,279 shares during the period. 79.91% of the stock is owned by institutional investors.
Wall Street Analyst Weigh In A number of brokerages have commented on META. Evercore reissued an “outperform” rating on shares of Meta Platforms in a research note on Thursday, July 30th. Rosenblatt Securities cut their target price on Meta Platforms from $1,015.00 to $883.00 and set a “buy” rating on the stock in a report on Thursday, July 30th. Piper Sandler reissued an “overweight” rating and issued a $785.00 price target (down from $800.00) on shares of Meta Platforms in a research report on Thursday, July 30th. Raymond James Financial boosted their price target on shares of Meta Platforms from $825.00 to $850.00 and gave the company a “strong-buy” rating in a research note on Tuesday, July 21st. Finally, Wells Fargo & Company lowered their price objective on shares of Meta Platforms from $835.00 to $640.00 and set an “overweight” rating on the stock in a report on Thursday, July 30th. Four equities research analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating and eight have given a Hold rating to the company. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus target price of $785.32.
Get Our Latest Analysis on META Meta Platforms News Summary Here are the key news stories impacting Meta Platforms this week:
Positive Sentiment: Meta’s AI investments are showing measurable benefits: second-quarter revenue increased 28% year over year to $60.8 billion, while AI-driven ad ranking reportedly lifted clicks and conversions. Advantage+ reached a $75 billion annual revenue run rate, supporting the argument that AI can improve monetization and eventually offset heavy infrastructure spending. Meta’s AI Payoff Has Already Begun Positive Sentiment: Some analysts and institutional investors remain constructive, viewing the recent selloff as excessive and citing future margin expansion, WhatsApp monetization and additional AI businesses as potential upside drivers. Meta also remains a major holding among several large investment firms. Meta’s Dip Offers A 30% Upside Potential Neutral Sentiment: Options traders are reportedly using range-bound strategies, indicating that markets may expect elevated volatility but no immediate decisive move while the legal proceedings unfold. Meta’s legal troubles has options traders eyeing the jade lizard Neutral Sentiment: CFO Susan Li sold 2,127 shares to cover tax withholding tied to vested equity awards. Because the transaction was described as tax-related rather than discretionary, it is unlikely to materially change the investment thesis. Susan Li Sells Meta Shares Negative Sentiment: The central market overhang is the landmark federal child-safety trial involving 29 states. Prosecutors allege Facebook and Instagram were deliberately designed to encourage addictive use among children, while former safety personnel have testified that Meta ignored or minimized internal warnings. A loss could lead to substantial penalties, product changes, restrictions on youth engagement and follow-on litigation, potentially threatening user activity and advertising revenue. Former Meta engineer resumes testimony Negative Sentiment: Privacy criticism surrounding Meta’s smart glasses, including workplace restrictions and reports of people being recorded without consent, creates reputational and adoption risks for the company’s wearables strategy. Meta Glasses privacy concerns Meta Platforms Stock Up 0.4% META opened at $546.03 on Thursday. The company has a debt-to-equity ratio of 0.32, a current ratio of 2.23 and a quick ratio of 2.23. The company’s 50-day moving average is $594.30 and its 200 day moving average is $617.08. Meta Platforms, Inc. has a fifty-two week low of $520.26 and a fifty-two week high of $790.80. The firm has a market capitalization of $1.39 trillion, a P/E ratio of 20.57, a PEG ratio of 0.93 and a beta of 1.25.
Meta Platforms (NASDAQ:META – Get Free Report) last issued its quarterly earnings data on Wednesday, July 29th. The social networking company reported $6.18 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $7.19 by ($1.01). The firm had revenue of $60.80 billion during the quarter, compared to the consensus estimate of $60.22 billion. Meta Platforms had a return on equity of 33.18% and a net margin of 29.83%.The company’s revenue for the quarter was up 28.0% on a year-over-year basis. During the same period in the previous year, the company posted $7.14 earnings per share. Research analysts expect that Meta Platforms, Inc. will post 28.5 earnings per share for the current fiscal year.
Meta Platforms Announces Dividend The firm also recently announced a quarterly dividend, which was paid on Thursday, June 25th. Stockholders of record on Monday, June 15th were paid a $0.525 dividend. This represents a $2.10 dividend on an annualized basis and a dividend yield of 0.4%. The ex-dividend date was Monday, June 15th. Meta Platforms’s payout ratio is presently 7.91%.
Insider Activity In related news, CFO Susan J. Li sold 2,127 shares of the stock in a transaction that occurred on Saturday, August 15th. The stock was sold at an average price of $689.85, for a total transaction of $1,467,310.95. Following the completion of the sale, the chief financial officer directly owned 15,347 shares of the company’s stock, valued at approximately $10,587,127.95. This trade represents a 12.17% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Curtis J. Mahoney sold 2,079 shares of Meta Platforms stock in a transaction on Wednesday, May 27th. The stock was sold at an average price of $609.92, for a total value of $1,268,023.68. Following the sale, the insider owned 1,118 shares in the company, valued at $681,890.56. This trade represents a 65.03% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 19,899 shares of company stock valued at $12,290,969 over the last three months. Corporate insiders own 13.53% of the company’s stock.
Meta Platforms Company Profile (Free Report)
Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.
Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.
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Meta Platforms Inc. (NASDAQ:META) stock traded higher by almost 1% during Thursday’s premarket session as risk appetite firms up into the open. Nasdaq futures are up 0.56% while S&P 500 futures have gained 0.09%.
The Big Tech giant is scaling its AI infrastructure and developing new ways to monetize artificial intelligence as it looks to strengthen advertising growth, expand revenue sources and eventually improve margins despite elevated capital spending.
Jones Sees AI Driving Top-Line GrowthBNP Paribas analyst Nick Jones expects Meta to continue delivering robust revenue growth as it monetizes its AI investments.
The analyst reiterated an Outperform rating on Meta with an $855 price forecast, implying about 57% upside from the stock’s Aug. 18 price of $543.70.
He said Meta’s aggressive AI investments could generate “abundant revenue” over time, helping justify the company’s rising capital spending.
He sees durable growth in the company’s core advertising business, complemented over time by subscription revenue, a potential cloud offering and fees from allowing external customers to use Meta’s AI models.
Jones said Meta currently needs all of its computing capacity internally and does not expect excess capacity in the near term.
Management views monetizing AI intelligence as financially more attractive than selling raw computing power.
Meta could offer cloud capacity if its internal requirements fall short of expectations, although management expects any such arrangements to remain short-term or strategic.
SMB Advertising Offers Another Growth OpportunityJones highlighted Meta’s opportunity among small and medium-sized businesses.
Management believes AI-powered tools can help smaller companies create more personalized advertising at scale, potentially unlocking additional digital advertising spending.
Meta also continues to see robust advertising demand despite some macroeconomic pressures.
Meta Builds Its Own AI ChipsThe company plans to begin manufacturing its internally designed Meta Training and Inference Accelerator (MTIA) chips in September.
It currently uses MTIA for inference workloads that improve recommendations and rankings, with plans to broaden its applications over time.
Jones Expects Profits and Margins to ImproveJones expects Meta’s capital expenditures to continue expanding through 2027 but believes the investments will generate enough revenue over time to justify that spending.
Meta management expects operating income to increase in dollar terms in 2026, although results may fluctuate from year to year.
Combined with continued cost discipline, Jones expects margin expansion to resume as AI-driven revenue growth scales.
Analyst Consensus & Recent Actions: Meta Platforms carries a Buy consensus rating, with an average price forecast of $767.42.
On July 30, UBS maintained a Buy rating and lowered its price forecast to $715. Baird maintained an Outperform rating and cut its price forecast to $750, while Goldman Sachs maintained a Buy rating and lowered its price forecast to $725.
Top ETF Exposure First Trust Dow Jones Internet Index Fund (NYSE:FDN): 9.46% Weight Natixis Loomis Sayles Focused Growth ETF (NYSE:LSGR): 7.99% Weight Invesco Nasdaq Internet ETF (NASDAQ:PNQI): 7.66% Weight Significance: Because META carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
Meta Price ActionMETA Stock Price Activity: Meta Platforms shares were up 0.73% at $550.00 during premarket trading on Thursday, according to Benzinga Pro data.
Meta Platforms' (META +0.43%) second-quarter numbers tell a strange story: The business itself is booming, but so much of its cash flow is being consumed by its AI build-out that there's little left over.
Free cash flow fell 91% year over year to just $784 million, even as revenue jumped and operating cash flow exceeded $31 billion. That combination should make long-term investors pause.
Meta reported Q2 revenue of about $60.8 billion, up 28%, with advertising sales rising 27% as AI tools improved ad targeting and content recommendations. Operating cash flow grew 25% to $31.86 billion, which is exactly what you want to see from a strong platform business.
The problem is on the other side of the ledger. Capital expenditures (capex) on servers, data centers, and network gear surged 83% to roughly $31.1 billion. Almost every dollar the business generated went straight back out the door again.
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Meta's early-year moves This was not a one-quarter blip. Earlier this year, Meta raised its full-year 2026 capex guidance to a range of $130 billion to $145 billion, up from an already huge $72.2 billion in 2025 and a prior forecast range of $115 billion to $135 billion. Analysts and infrastructure trackers now talk about Meta spending more in 2026 on AI data centers and compute than it did in 2024 and 2025 combined, with tens of gigawatts of new capacity planned to train and serve Llama models and other "Meta Superintelligence" projects.
Image source: Getty Images.
Heavy investment is not automatically bad. AI is already boosting Meta's ad business, and CEO Mark Zuckerberg points to more than 1 million businesses using AI agents on WhatsApp and Messenger each week.
The worry is timing and scale. Sell-side models now anticipate that Meta's free cash flow will turn negative in 2026 and drop by tens of billions of dollars more in 2027 as the company's capex continues to run ahead of its cash generation. That would be a dramatic swing for a company that produced $43.6 billion of free cash flow in 2025.
What about Meta investors? For shareholders, the risk is that Meta has locked itself into noncancelable infrastructure and component commitments of well over $200 billion without a clear, near-term line of sight into how much incremental profit those data centers and GPUs will generate.
If the AI products built on top of this spend do not lead to sustainably higher margins or new cash-rich businesses, Meta Platforms' shareholders could find themselves in a bad place. They would own a company that looks more like a capital-intensive utility than a high-margin software platform, with less flexibility to dial back its spending if conditions change.
That is why a 91% collapse in free cash flow in the middle of a period of strong revenue growth is more than a quirky headline. It is a reminder that the AI race is a balance-sheet race, and that not every participant will emerge with the same cash resilience it started with.
Negative FCF and net debt pains may be possible for META in H2'26, given the raised FY2026 capex guidance and heavier H2'26 weightage. Despite robust advertising growth, the stock may continue underperforming since they lack the conventional compute revenues/margins/backlog metrics to justify the hefty AI capex. Lawsuits with penalties up to $1.4T and possible AI governance changes may materially constrain META's ad monetization/engagement trends, contributing to the depressed stock prices.
Activest Wealth Management lowered its stake in shares of Meta Platforms, Inc. (NASDAQ:META – Free Report) by 29.5% during the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 17,588 shares of the social networking company’s stock after selling 7,373 shares during the quarter. Meta Platforms comprises approximately 1.9% of Activest Wealth Management’s investment portfolio, making the stock its 12th largest holding. Activest Wealth Management’s holdings in Meta Platforms were worth $9,907,000 as of its most recent SEC filing.
Several other hedge funds and other institutional investors have also recently modified their holdings of the stock. RHL Group LLC acquired a new stake in shares of Meta Platforms during the fourth quarter worth $28,000. Strategic Wealth Advisors LLC purchased a new stake in shares of Meta Platforms during the fourth quarter valued at $29,000. Niles Investment Management LLC acquired a new position in shares of Meta Platforms in the 4th quarter valued at $29,000. Axiom Investment Management LLC acquired a new position in shares of Meta Platforms in the 1st quarter valued at $36,000. Finally, Bayban raised its stake in shares of Meta Platforms by 100.0% in the first quarter. Bayban now owns 70 shares of the social networking company’s stock worth $40,000 after purchasing an additional 35 shares during the last quarter. 79.91% of the stock is owned by hedge funds and other institutional investors.
Insiders Place Their Bets In related news, COO Javier Olivan sold 1,258 shares of the business’s stock in a transaction on Monday, August 10th. The stock was sold at an average price of $600.00, for a total transaction of $754,800.00. Following the completion of the transaction, the chief operating officer directly owned 1,517 shares of the company’s stock, valued at $910,200. The trade was a 45.33% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Susan J. Li sold 2,127 shares of the business’s stock in a transaction on Saturday, August 15th. The stock was sold at an average price of $689.85, for a total value of $1,467,310.95. Following the transaction, the chief financial officer directly owned 15,347 shares of the company’s stock, valued at $10,587,127.95. The trade was a 12.17% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 19,899 shares of company stock worth $12,290,969 in the last ninety days. 13.53% of the stock is owned by corporate insiders.
Key Meta Platforms News Here are the key news stories impacting Meta Platforms this week: Positive Sentiment: Meta’s AI investments are showing measurable benefits: second-quarter revenue increased 28% year over year to $60.8 billion, while AI-driven ad ranking reportedly lifted clicks and conversions. Advantage+ reached a $75 billion annual revenue run rate, supporting the argument that AI can improve monetization and eventually offset heavy infrastructure spending. Meta’s AI Payoff Has Already Begun Positive Sentiment: Some analysts and institutional investors remain constructive, viewing the recent selloff as excessive and citing future margin expansion, WhatsApp monetization and additional AI businesses as potential upside drivers. Meta also remains a major holding among several large investment firms. Meta’s Dip Offers A 30% Upside Potential Neutral Sentiment: Options traders are reportedly using range-bound strategies, indicating that markets may expect elevated volatility but no immediate decisive move while the legal proceedings unfold. Meta’s legal troubles has options traders eyeing the jade lizard Neutral Sentiment: CFO Susan Li sold 2,127 shares to cover tax withholding tied to vested equity awards. Because the transaction was described as tax-related rather than discretionary, it is unlikely to materially change the investment thesis. Susan Li Sells Meta Shares Negative Sentiment: The central market overhang is the landmark federal child-safety trial involving 29 states. Prosecutors allege Facebook and Instagram were deliberately designed to encourage addictive use among children, while former safety personnel have testified that Meta ignored or minimized internal warnings. A loss could lead to substantial penalties, product changes, restrictions on youth engagement and follow-on litigation, potentially threatening user activity and advertising revenue. Former Meta engineer resumes testimony Negative Sentiment: Privacy criticism surrounding Meta’s smart glasses, including workplace restrictions and reports of people being recorded without consent, creates reputational and adoption risks for the company’s wearables strategy. Meta Glasses privacy concerns Meta Platforms Stock Performance NASDAQ:META opened at $546.03 on Thursday. The company has a debt-to-equity ratio of 0.32, a quick ratio of 2.23 and a current ratio of 2.23. Meta Platforms, Inc. has a fifty-two week low of $520.26 and a fifty-two week high of $790.80. The stock has a market capitalization of $1.39 trillion, a PE ratio of 20.57, a P/E/G ratio of 0.93 and a beta of 1.25. The company has a fifty day moving average of $594.30 and a two-hundred day moving average of $617.08.
Meta Platforms (NASDAQ:META – Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The social networking company reported $6.18 EPS for the quarter, missing the consensus estimate of $7.19 by ($1.01). The firm had revenue of $60.80 billion for the quarter, compared to analysts’ expectations of $60.22 billion. Meta Platforms had a return on equity of 33.18% and a net margin of 29.83%.The firm’s revenue for the quarter was up 28.0% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $7.14 earnings per share. As a group, research analysts forecast that Meta Platforms, Inc. will post 28.5 earnings per share for the current fiscal year.
Meta Platforms Announces Dividend The company also recently announced a quarterly dividend, which was paid on Thursday, June 25th. Shareholders of record on Monday, June 15th were given a $0.525 dividend. This represents a $2.10 annualized dividend and a yield of 0.4%. The ex-dividend date of this dividend was Monday, June 15th. Meta Platforms’s payout ratio is currently 7.91%.
Wall Street Analysts Forecast Growth META has been the subject of a number of recent research reports. Stifel Nicolaus reduced their price target on shares of Meta Platforms from $805.00 to $780.00 and set a “buy” rating for the company in a research report on Friday, May 1st. KeyCorp reduced their price objective on Meta Platforms from $790.00 to $780.00 and set an “overweight” rating for the company in a research note on Thursday, July 30th. Bank of America decreased their price objective on Meta Platforms from $835.00 to $810.00 and set a “buy” rating for the company in a report on Thursday, July 30th. TD Cowen dropped their price objective on shares of Meta Platforms from $800.00 to $750.00 and set a “buy” rating on the stock in a research note on Thursday, July 30th. Finally, Rothschild & Co Redburn lifted their target price on shares of Meta Platforms from $900.00 to $1,000.00 and gave the company a “buy” rating in a report on Tuesday, July 21st. Four research analysts have rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating and eight have issued a Hold rating to the stock. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average target price of $785.32.
Check Out Our Latest Analysis on Meta Platforms
Meta Platforms Profile (Free Report)
Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.
Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.
Further Reading Five stocks we like better than Meta Platforms Bloom Energy’s AI Surge Meets a Valuation Reality Check Target Is Winning Shoppers Back—Can the Rally Reach $180? IonQ’s Space Contract Points to a New Frontier for Quantum Investors Is Apple’s AI Strategy Smarter Than Skeptics Think?
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A former employee testified Wednesday that some of Meta's safety tools for Facebook and Instagram were "designed to fail," contradicting the company's defense strategy in a landmark trial in California.
Meta Platforms remains a Strong Buy as the recent sell-off is disconnected from operational performance and presents a compelling entry point. Q2 revenue surged 27.9% Y/Y to $60.8B, with ad business strength and both impressions and price per ad rising, driven by AI investments. Short-term free cash flow is pressured by elevated CapEx for AI buildout, but META's $90B cash position and new monetization initiatives mitigate solvency concerns.
Mark Zuckerberg and his minions at Meta had a “don’t ask, don’t tell” policy when child safety issues arose and preferred to turn a blind eye to protect profits, according to scorching testimony from a former employee on the second day of the historic trial Wednesday.
Arturo Béjar, a former Meta safety researcher who has become one of its biggest critics, told jurors in California federal court that Zuckerberg did little to address the harmful effects of Facebook and Instagram despite having near-unchecked power as the company’s CEO.
“You just cannot trust Mark Zuckerberg with kids,” Béjar said on the witness stand.
A courtroom sketch of Arturo Bejar during his testimony. REUTERS He was the first witness called by the coalition of 29 state attorneys general who have accused Meta of causing a teen mental health crisis through addictive app design that fueled anxiety, depression and even suicide – all while illegally harvesting kids’ data without parental consent.
The state AGs are seeking to force Meta to change key features of its apps and to impose major penalties on Meta over its alleged misdeeds. Lawyers for the states said the damages could approach $200 billion, while Meta has alleged the actual number could reach an astronomical $1.4 trillion.
Béjar, who led a safety-focused team at Meta from 2009 to 2015 and later returned as a consultant from 2019 to 2021, accused Zuckerberg of lying about the company’s commitment to protecting kids in public statements.
“I felt that he created a false and misleading impression of Facebook’s commitment to young people,” said Béjar, who estimated that he spoke to Zuckerberg about safety issues at least 100 times during his tenure.
Béjar was a safety researcher at Meta. REUTERS The researcher added that Meta had the capability to detect underage users who were evading safeguards but had a “don’t ask, don’t tell” policy to protect its bottom line.
“Where the youngest kids are is where the users are going to be in the future,” Béjar said.
He previously served as a key witness in a separate trial brought by New Mexico Attorney General Raul Torrez, where he emotionally described how his then-16-year-old daughter received sick messages from pervs including “unsolicited penis pictures” shortly after she joined Instagram.
Mark Zuckerberg is expected to testify during the trial. Getty Images Under cross examination by a Meta attorney in the current trial, Béjar admitted that he was caught off guard by the extent of the risks his daughter would face when he allowed her to join Instagram.
“I kept an eye on how distressing it was for her,” Béjar said. “She got a good following, at the price of harm.”
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The state AGs’ trial is expected to last roughly six weeks. Zuckerberg and Instagram chief Adam Mosseri are each expected to testify during the proceedings.
Meta has repeatedly denied wrongdoing and accused the state AGs of seeking penalties that go far beyond the scope of their case.
During opening statements on Tuesday, Meta’s lawyer Paul Schmidt argued that Zuckerberg and his allies have worked to improve Facebook and Instagram and taken many steps to protect kids online – including parental oversight tools and time limits for social media use.
, the social-media, advertising and AI powerhouse, rebounded roughly 0.9% to $548.43 Wednesday morning after getting hammered nearly 4% on Tuesday. Lower Treasury yields brought buyers back into mega-cap tech. But one green morning does not erase the bigger question hanging over Meta: just how expensive will the AI race become?
The growth engine is still roaring. Meta's second-quarter revenue surged 28% to $60.8 billion, with ad impressions jumping 14% and average ad prices climbing another 12%. Those are monster numbers for a company already operating at Meta's scale. Then comes the bill. Expenses exploded 55% to $42 billion, operating income fell 8%, and operating margin collapsed to 31% from 43%. Meta is selling more ads at higher prices. It is also spending at a breathtaking pace to win the AI arms race.
And that is where the stock gets interesting. GuruFocus puts Meta at $552.25 on Aug. 19 against a GF Value™ estimate of $839.41, meaning the stock trades 34.21% below GF Value™. That is a massive gap. But the market is not going to close it simply because Meta looks cheap on paper. Investors need proof that billions pouring into AI infrastructure and technical talent can eventually produce stronger engagement, sharper ad monetization and better margins. Meta already has the growth. Now it needs to show that AI can become a profit machine instead of an ever-larger bill.
One of the many beauties of options trading is the ability to make money on a rangebound stock. Shares of Meta Platforms are presenting that opportunity right now.
With its upside capped by litigation and much of the downside has already been priced in, it may make sense to try to capture some elevated options premium and sell both sides. The curiously named options strategy "jade lizard" — more on this in a second — collects a rich premium without the unlimited upside risk of a short strangle.
As opening statements began in Oakland today, where 29 state attorneys general accuse Meta of deliberately designing Facebook and Instagram to hook young users, META shares are off more than 30% from the highs of a year ago.
The headline figure, a theoretical worst case of $1.4 trillion in damages has been floated, although I think that number borders on the absurd, especially if one considers the inevitable appeal that would follow.
Behind that case sit more than 3,000 personal-injury suits in the federal MDL (multi-district litigation that combines similar lawsuits/related cases that seek to answer similar questions of fact), roughly 1,300 school-district claims, a nearly $1 billion New Mexico judgment, and a $6 million bellwether loss in Los Angeles. While virtually no one believes the trillion-dollar headline represents the real risk, nobody should expect a sustained rally through a seven-week trial either.
Much of the downside, arguably, has already been paid for. Meta is the worst-performing stock in the "Magnificent Seven" over the past 12 months, the market cap having fallen more than $600 billion so far. It is also acting as a boat anchor on the communications sector generally as it is the largest constituent. Granted some of that decline is probably also concerns about AI capex, but at about 22 times earnings with revenue still growing 28% a lot of anxiety is already baked in the price.
Enter the jade lizard.
In this strategy, you sell an out-of-the-money put and also sell an out-of-the-money call spread. Often this trade is structured such that the total premium collected exceeds the width of the call spread, eliminating upside risk entirely, although without a potential catalyst to drive shares sharply higher, a modest amount of upside risk would also be acceptable. Implied volatility is, unsurprisingly, slightly inflated by the lawsuit(s). The September 25th expiration captures some of that while avoiding the Q3 earnings report expected in late October and also falls short of the anticipated length of the trial of six to eight weeks.
If shares sit between the short strikes at expiration, YOU keep the full credit. A rally through the call spread risks less than 5% of the current stock price and the downside risk is that one purchases the stock at less than $480/share, another 12% lower than where the stock is currently trading and below the tariff tantrum lows of late April 2025. If the stock does fall to those levels, and one purchases the stock around $480 share, one could look to then collect premium against the resulting position by selling covered calls, or covered call spreads (a position we currently have in META).
As oral arguments in the child safety trial for Meta Platforms (META) unfold, James Czerniawski explains the crux behind state prosecutor arguments pointing to "addictive" features of the Mag 7 company. He says features like autoplay and "infinite scrolling" make a strong case against Meta.
Meta Platforms Inc. (META, Financials), the parent company of Facebook and Instagram, is engaged in a big child-safety trial, but California is challenging the eye-popping $1.4 trillion figure that has trailed the case.
The lawsuit seeks civil penalties, restitution and deterrence, not damages, California Attorney General Rob Bonta said.
That's important because Meta's lawyers had previously warned that the penalties could theoretically approach $1.4 trillion. That number is the highest possible calculation, not what states are actually seeking, Bonta said.
State attorneys general have pointed to about $200 billion instead as a more realistic figure. That is still a big risk. The trial is expected to last six to seven weeks and any final penalty would be up to the judge.
The takeaway for investors is straightforward: the worst-case headline may be over the top, but Meta still has a possible expensive legal battle with real money at stake.
Meta Platforms, Inc. stock is under pressure amid renewed AI bubble fears, and legal headwinds, yet the fundamental thesis is not broken, presenting a compelling risk-reward opportunity. META's aggressive AI capex has squeezed free cash flow, while its off-balance-sheet commitments pose risks if revenue fails to grow fast enough. I expect META to scale business agents, enterprise APIs, consumer subscriptions, and potentially sell compute directly to third party, diversifying beyond its core ads business.
I've seen many people voice concerns about the child safety trial involving Meta Platforms (META +1.42%) and how it could wreak havoc on the business. Not only could it result in significant fines and changes to its processes, but it may end up crippling the stock along the way.
I don't agree with that. I'm not saying this as a fan or investor of the company. In fact, I believe it is facing significant challenges, but that's largely due to competition and its apps not being all that great. I don't, however, think that this trial will lead to the company's demise or even have a big impact on the social media stock. Here's why.
Image source: Getty Images.
It's going to be hard to win I don't doubt for a second that social media is bad for kids and can hurt their development. But here's the problem: how do you prove that? While there may be no shortage of personal stories about how it may have impacted individual people, measuring the effects of social media on mental health -- in a quantifiable way -- is going to be challenging, to say the least.
Some people view this as the "big tobacco" moment for Meta and social media companies. But with tobacco, there's more of a direct path to its harms, showing that people develop illnesses that are linked to tobacco. Trying to prove that Meta Platforms and its apps are mainly responsible for the issues kids have with mental health isn't going to be easy to prove at all. And that would be necessary for it to result in significant changes and fines for the tech company.
At the very least, these issues could drag out for years.
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Meta's stock is risky, but it's not because of the trial Meta Platforms' stock has been falling this year. It's down 17% so far, and it may look cheap, trading at around 21 times its trailing earnings, but it's not a stock I'd buy simply because of its leadership. The company seems to always be chasing the latest tech hype, whether it's the metaverse or, now, artificial intelligence. I'm not convinced of its strategy or its ability to thrive amid increased competition, which is why I'd stay away from it.
While the ongoing social media trial may not cripple its business or result in devastating fines, that doesn't mean the stock is a safe or good buy.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
BTC Capital Management Inc. boosted its holdings in shares of Meta Platforms, Inc. (NASDAQ:META – Free Report) by 3.2% in the second quarter, according to its most recent filing with the Securities and Exchange Commission. The fund owned 50,696 shares of the social networking company’s stock after buying an additional 1,562 shares during the quarter. Meta Platforms accounts for about 1.7% of BTC Capital Management Inc.’s portfolio, making the stock its 10th largest holding. BTC Capital Management Inc.’s holdings in Meta Platforms were worth $28,553,000 at the end of the most recent quarter.
Several other institutional investors and hedge funds have also bought and sold shares of META. First National Bank Sioux Falls lifted its position in Meta Platforms by 0.7% during the fourth quarter. First National Bank Sioux Falls now owns 2,001 shares of the social networking company’s stock valued at $1,321,000 after purchasing an additional 14 shares during the period. Levin Capital Strategies L.P. boosted its holdings in Meta Platforms by 1.4% in the fourth quarter. Levin Capital Strategies L.P. now owns 984 shares of the social networking company’s stock valued at $649,000 after purchasing an additional 14 shares during the last quarter. Vista Capital Partners Inc. grew its position in Meta Platforms by 1.3% during the 2nd quarter. Vista Capital Partners Inc. now owns 1,075 shares of the social networking company’s stock worth $794,000 after purchasing an additional 14 shares during the period. Arcataur Capital Management LLC grew its position in Meta Platforms by 0.9% during the 4th quarter. Arcataur Capital Management LLC now owns 1,736 shares of the social networking company’s stock worth $1,146,000 after purchasing an additional 15 shares during the period. Finally, Acorn Creek Capital LLC raised its stake in shares of Meta Platforms by 0.7% during the 4th quarter. Acorn Creek Capital LLC now owns 2,118 shares of the social networking company’s stock valued at $1,398,000 after buying an additional 15 shares during the last quarter. 79.91% of the stock is currently owned by institutional investors and hedge funds.
Analysts Set New Price Targets META has been the subject of several analyst reports. Wolfe Research reissued an “outperform” rating and issued a $700.00 price objective on shares of Meta Platforms in a report on Thursday, July 30th. Citizens Jmp reduced their price target on Meta Platforms from $800.00 to $770.00 and set a “market outperform” rating for the company in a research report on Thursday, July 30th. Cantor Fitzgerald decreased their price target on Meta Platforms from $770.00 to $680.00 and set an “overweight” rating for the company in a report on Thursday, July 30th. Royal Bank Of Canada restated an “outperform” rating and issued a $810.00 price objective on shares of Meta Platforms in a research report on Monday, June 1st. Finally, Robert W. Baird dropped their price objective on shares of Meta Platforms from $830.00 to $750.00 and set an “outperform” rating on the stock in a research note on Thursday, July 30th. Four analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating and eight have given a Hold rating to the company’s stock. According to MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus target price of $785.32.
Read Our Latest Report on META Trending Headlines about Meta Platforms Here are the key news stories impacting Meta Platforms this week:
Positive Sentiment: Some analysts view META’s decline as excessive, arguing that one-time legal and severance costs have weighed on earnings and that future margin expansion, AI-powered advertising, and WhatsApp monetization could support substantial upside. Meta also remains among the major technology holdings disclosed by Appaloosa Management. Meta’s Dip Offers A 30% Upside Potential Neutral Sentiment: A federal child-safety trial has begun in California, with 29 states alleging that Meta designed Facebook and Instagram to encourage compulsive use among younger users, concealed health risks, and violated child-privacy and consumer-protection laws. The states are seeking potentially enormous damages—reported at roughly $200 billion in some filings and as much as $1.4 trillion in broader claims—as well as changes to the platforms. The outcome could establish a precedent for similar lawsuits and regulatory action across the industry. Meta faces 29-state trial that could reshape Instagram and Facebook Negative Sentiment: The trial is the immediate catalyst for investor selling because a loss could lead to major financial penalties, costly product changes, and restrictions on how Meta engages younger users—potentially affecting user engagement and advertising revenue. The risk is amplified by Meta’s recent loss of a nearly $1 billion New Mexico judgment and the prospect of additional lawsuits. Meta Stock Sinks as $200B Trial Threatens Facebook and Instagram Ad Revenue Negative Sentiment: Investors are also scrutinizing Meta’s AI spending. Large data-center investments are consuming cash, while debt and off-balance-sheet financing arrangements could create future obligations if AI assets underperform. Meta’s recent quarterly EPS miss and margin pressure add to concerns that the AI buildout may take time to generate returns. What Could Meta’s Off-Balance-Sheet AI Financing Mean for Investors? Negative Sentiment: Privacy concerns are spreading beyond regulators: U.S. Immigration and Customs Enforcement has barred employees from wearing Meta’s smart glasses at work, adding to reputational and adoption risks for the device business. ICE Bars Its Workers From Wearing Meta’s Smart Glasses on the Job Insider Buying and Selling at Meta Platforms In related news, COO Javier Olivan sold 3,348 shares of the company’s stock in a transaction dated Monday, July 6th. The shares were sold at an average price of $600.97, for a total transaction of $2,012,047.56. Following the completion of the transaction, the chief operating officer owned 9,498 shares in the company, valued at $5,708,013.06. This represents a 26.06% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Susan J. Li sold 2,127 shares of the firm’s stock in a transaction dated Saturday, August 15th. The shares were sold at an average price of $689.85, for a total transaction of $1,467,310.95. Following the completion of the transaction, the chief financial officer directly owned 15,347 shares in the company, valued at $10,587,127.95. This represents a 12.17% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 19,899 shares of company stock valued at $12,290,969 over the last ninety days. Corporate insiders own 13.53% of the company’s stock.
Meta Platforms Stock Down 4.4% Meta Platforms stock opened at $543.82 on Wednesday. The stock has a market capitalization of $1.39 trillion, a PE ratio of 20.48, a price-to-earnings-growth ratio of 1.01 and a beta of 1.25. Meta Platforms, Inc. has a 12 month low of $520.26 and a 12 month high of $790.80. The business has a 50 day simple moving average of $594.80 and a 200-day simple moving average of $618.43. The company has a debt-to-equity ratio of 0.32, a current ratio of 2.23 and a quick ratio of 2.23.
Meta Platforms (NASDAQ:META – Get Free Report) last announced its earnings results on Wednesday, July 29th. The social networking company reported $6.18 earnings per share for the quarter, missing the consensus estimate of $7.19 by ($1.01). Meta Platforms had a return on equity of 33.18% and a net margin of 29.83%.The business had revenue of $60.80 billion for the quarter, compared to analyst estimates of $60.22 billion. During the same period in the previous year, the company earned $7.14 earnings per share. The company’s quarterly revenue was up 28.0% compared to the same quarter last year. On average, analysts anticipate that Meta Platforms, Inc. will post 28.5 EPS for the current fiscal year.
Meta Platforms Announces Dividend The business also recently disclosed a quarterly dividend, which was paid on Thursday, June 25th. Shareholders of record on Monday, June 15th were given a dividend of $0.525 per share. The ex-dividend date was Monday, June 15th. This represents a $2.10 dividend on an annualized basis and a yield of 0.4%. Meta Platforms’s dividend payout ratio is currently 7.91%.
About Meta Platforms (Free Report)
Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.
Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.
See Also Five stocks we like better than Meta Platforms The AI Boom Is Turning This Cable Maker Into a Stock to Watch A Star Investor Just Trimmed Amazon—Here’s What It means Wendy’s Deal Buzz May Give Fast-Food Investors a New Reason to Look Home Depot Analysts See a Path to $375 and Beyond Want to see what other hedge funds are holding META? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Meta Platforms, Inc. (NASDAQ:META – Free Report).
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Opening arguments have begun in Oakland in the youth-safety trial brought by California and other state attorneys general against Meta Platforms (NASDAQ:META | META Price Prediction), which is expected to run for about seven weeks. Mark Zuckerberg and Adam Mosseri are expected to testify. The allegations center on data collection from children under 13, design choices that drove excessive use, and public statements about Facebook and Instagram safety that the states say were misleading.
California seeks up to $1.4 trillion, while Meta contends the correct figure is closer to $200 billion.
What matters to shareholders is whether the court orders structural changes to algorithms and age gating, and whether this trial becomes a template for future cases. Pending school district suits and other state cases, Meta stock closed at $543.67, down 28.92% over the past year, while covering analysts remain at an average target of $754.14, with 55 buy ratings, 7 holds, and 0 sell ratings.
That gap is what this trial forces investors to price.
Why the Headline Damages Are the Wrong Anchor The $1.4 trillion ceiling is a statutory maximum that sets the outer legal boundary, not a probable outcome. Meta’s own math produces a different number, and neither figure will be what the company ultimately pays if it loses. Anchoring on the biggest possible outcome is how retail investors panic, and how sophisticated ones lose focus.
CNBC correspondent Julia Boorstin framed the stakes clearly: “Today’s opening arguments in Oakland will be watched closely in this very high stakes case. In addition to demanding changes to Meta’s algorithms, Meta says the state AGs are asking for $1.4 trillion.” The demand for algorithmic changes deserves at least as much attention as the dollar figure, because that is the part of a verdict that would follow Meta into every future quarter.
Meta argues that “the AGs offer no proof anyone in their states was misled, claimed benign features like having an Instagram account somehow harmed their residents and attempt to penalize Meta for industry wide challenges like age verification.”
The age verification point deserves serious weight. Every major consumer platform relies on self-reported ages, and no scalable identity system exists that satisfies privacy law, parents, and regulators simultaneously. If Meta loses on that theory, every peer platform inherits the same exposure.
What a Court Could Actually Do to the Apps The injunctive piece is where investors should focus. A judgment reshaping default settings for minors, restricting recommendation ranking for under-18 accounts, or mandating a specific age-verification standard would affect the 3.6 billion daily active users across the family of apps in ways a cash payment never would.
California Attorney General Rob Bonta positioned the case in those terms: “As the home of great innovators and Silicon Valley, California has a particular opportunity and obligation to be a catalyst for change.” Change here means product change alongside any monetary award.
The template risk is significant. The New Mexico Attorney General told CNBC that “California judgment by itself could be gargantuan enough that it changes the ability of this company to do what it needs to finance into the future.” Even discounting that for advocacy, a plaintiff-friendly verdict gives the next set of AGs and school districts a playbook they do not currently have.
Meta told investors this year that outcomes could be material. Management flagged “ongoing youth-related legal and regulatory matters, including several U.S. trials scheduled for the year that may result in material losses,” and Q2 2026 already carried $2.4 billion in legal charges that flowed through the 8-K filing.
Reading the Analyst Buy Wall Against a Broken Chart The disconnect between sentiment and price action is where investors should form a view. Analysts covering the stock are almost uniformly positive, yet shares are down 17.5% year to date and 15.84% over the past month. Something reflected in the share price is not captured by models built on ad revenue growth.
The market has begun to price in the litigation overhang but has not yet priced in the template scenario. A pure damages hit, even a large one, is survivable for a company with $228 billion in trailing revenue and a 22x P/E. A structural remedy limiting algorithmic personalization for minors, and that other courts copy, would justify the current gap between price and target.
Insider behavior does not suggest panic. Zuckerberg’s July 31 transactions were zero-price reclassifications rather than open market sales, and COO Javier Olivan’s disposals follow a recurring pattern consistent with a pre-established 10b5-1 plan. The risk remains real, but the people closest to it are behaving as though this trial is manageable rather than company-ending.
What to watch over the next seven weeks is the injunctive language the AGs are pressing for and the judge’s receptiveness to it, because that is the part of this case that could reshape the apps and the earnings power that the buy ratings depend on.
Contact [email protected] for any questions or corrections.
“I’ve had one person who told me that their intentions were creepy,” a man tells me over a video call, on condition of anonymity. He’s based in Los Angeles, and while we speak, he eats what appears to be tuna directly out of the can. “He said: ‘I go to strip clubs, and I want to record the strippers … Normally I put my phone in my chest pocket, but the glasses are more convenient.’”
The man I’m talking to runs a business called Ghost Metas. He’s one of hundreds of vendors, easily discoverable online, who specialise in disabling the flashing LED light embedded in Meta’s smartglasses that blinks when wearers capture photos, videos and audio. After Ghost Metas disables the LED, it’s impossible for someone to know they’re being filmed.
He flips his camera over to show me his work bench, revealing painter’s tape, a drill, a hole puncher, a dental pick and a tube of resin. He says he’s worked on about 100 pairs of glasses, and that one pair only takes him about 15 to 20 minutes.
“In public, I don’t think we have privacy any more, period,” he says, when I ask whether what he’s doing feels wrong. “My argument is if you’re really worried about your privacy, don’t go outside.”
The success of Ghost Metas is parallel to the runaway success of Meta Glasses, designed in partnership with established glasses brands Ray-Ban and Oakley. Meta said that it sold roughly 7 million pairs in 2025 alone, practically tripling combined sales numbers from 2023 and 2024. Influencers, athletes and global celebrities such as Chris Hemsworth and Teyana Taylor have embraced the tech in sponsored posts and buzzy ads. The glasses mark a turnaround for a company that made big missteps by overinvesting in virtual reality “metaverses” and trailing behind in the AI race.
The most notable endorser has been Kylie Jenner who, in June, collaborated with Meta on her own line of AI glasses. “Hey Meta – take a picture,” Jenner commands her $399 Starfire glasses in an advertisement for the collab. Meta promises that users can ask Kylie’s glasses any question, and the AI will issue “every response in Kylie’s voice”.
The reality of how people are using the glasses has been less benign. They have been widely used for exploitation and privacy violations, much of which has been bragged about on social media by bad actors themselves. Online creators – primarily men – have used the glasses to troll boardwalks, college campuses, and streets outside bars in search of women to hit on, and then post the interactions. Some men have recorded overtly racist videos in which they enter massage parlors staffed by Asian women and ask for “happy ending” massages. Others have used the glasses to record bathing suit-clad women at the beach.
I’ve spoken with people who say Meta Glasses have been used to secretly record their private interactions, with one source describing an incident inside her house that she felt endangered her children.
Many of these videos are captured and posted online without the consent of their subjects, often by influencers who want to humiliate the subjects they’ve filmed.
To protect against this, on every pair of glasses there’s an LED light that’s supposed to let people know the glasses are recording. Meta makes assurances that the glasses won’t record when the LED light is blocked or obscured. But the man behind Ghost Metas says it’s easy to modify the glasses to block the light without triggering the refusal failsafe.
He acknowledges that the overwhelming majority of his clients have been men but he doesn’t agree that the glasses are only being used for spying. Many of his customers are parents, who he says tell him: “‘I want to record my kid, but every time the light’s on, the kid just keeps looking at the light.’” He also said he’s done several pairs for food delivery drivers and others with similar jobs, who have told him that they want to protect themselves from false claims of undelivered orders or unwanted harassment.
What Ghost Metas is doing clearly breaks the terms of service of Meta Glasses. But could Meta argue it’s an inversion of their appeal? Meta’s CEO, Mark Zuckerberg, who has positioned the glasses as a smartphone killer, said in September 2025 that “the promise of glasses is to preserve this sense of presence that you have with other people”. Smartglasses bring the functionality of smartphones, cameras included, into every moment. Several people I spoke to say that even when the LED is functioning as intended it can be subtle and difficult to spot from far away, especially if you aren’t aware of how smartglasses work. Others shared that they sought out the glasses to capture more “natural” footage of those around them, explicitly because people act differently when they know they’re being recorded. As Meta themselves put in their advertising materials: “Record life as you live it – every detail, every angle.”
Mark Zuckerberg records video using the Orion augmented reality (AR) glasses, triggering a small light on the frames, during the Meta Connect event in Menlo Park, California, in September 2024. Photograph: Bloomberg/Getty ImagesOther tech giants have tried – and failed – to successfully market smartglasses. In 2013, Google released Google Glass, but discontinued them in 2015 amid backlash that resulted in a journalist getting assaulted in the street for wearing a pair. Snapchat tried for years to push Spectacles, first released in 2016, to no avail. (It’s now slated to release augmented-reality glasses called Specs later this year, though between their awkwardly bulbous appearance and $2,195 price tag, they may be dead on arrival). Apple’s Vision Pro, meanwhile, has seen disappointing sales since its release in early 2024. Beyond headwear, there have been products like an always-listening version of Amazon’s Halo Band bracelet, which the Washington Post once called “the most invasive tech we’ve ever tested”. Amazon scrapped the always-on microphone in 2021, again in response to people finding the update wildly creepy, and the Halo line was discontinued entirely by 2023.
So why did Meta Glasses succeed when so many of their competitors were deemed creepy and ugly? One big answer seems to be fashion.
Unlike their predecessors, Meta Glasses have familiar designer names behind them. EssilorLuxottica, the Italian corporation that owns Ray-Ban and Oakley, is an eyewear titan that raked in about $33.8bn in 2025, with about 12% of its overall sales to Ray-Ban.
“Ray-Ban is fashionable in a perennial sort of way, not a fleeting sort of way,” said Amy Odell, fashion journalist and author of the Back Row newsletter. Zuckerberg, she added, “is right that in order to get these things to sell, they do have to be great glasses first. And you really can’t go wrong by going to the most iconic sunglasses brand.”
Meta also makes a number of privacy assurances about the glasses, promising users they are “designed for privacy” and that Meta doesn’t have access to recordings made by using the glasses. However, a joint investigation by the Swedish newspapers Svenska Dagbladet and Göteborgs-Posten revealed that Meta was, in fact, storing recordings made by glasses wearers. The papers interviewed Kenyan whistleblowers working for the controversial content moderation sweatshop Sama, which is subcontracted by Meta to sort through and annotate content that may be fed into Meta’s AI models.
“In some videos you can see someone going to the toilet, or getting undressed,” one contractor told the Swedish newspapers. “I don’t think they know, because if they knew they wouldn’t be recording.” Other Sama employees shared stories of reviewing content collected while glasses wearers were having sex, looking at their or their partner’s naked body, or viewing sensitive documents that revealed personal identifying information. The reporting quickly prompted a class action lawsuit in San Francisco federal court, which alleges that Meta engaged in false advertising in relation to its privacy assurances.
In a statement, Meta said that “unless users choose to share media they’ve captured with Meta or others, that media stays on the user’s device. When people share content with Meta AI, we sometimes use contractors to review this data for the purpose of improving people’s experience … we take steps to filter this data to protect people’s privacy.”
The lawyers bringing the class action disagree. “These products aren’t designed for user control and privacy,” said Ryan Clarkson, whose firm filed the suit. “In my opinion, they’re designed to maximise profits, and to turn every person who buys one into a Trojan horse of surveillance.”
‘I felt extremely violated’Nonconsensual recordings can happen to anyone, anywhere. People have been secretly recorded in their workplace; one lawyer told the Guardian that he was covertly filmed by potential clients during a free consultation. Some Meta Glasses wearers have recorded videos of trips to hospitals and children’s dentist offices and shared them online.
You could even be covertly recorded in your own home – as was the case for Brek Mettra, a mother of two in Utah who was secretly filmed in her house during a transaction with a local vintage clothing seller. After the pair connected on Facebook Marketplace (also run by Meta), the seller met Mettra at her home to buy a T-shirt. Unbeknownst to her, he had used Meta Glasses to record their exchange, which he then uploaded to social media as content to promote his business.
Mettra said it wasn’t until a “random guy” in Philadelphia contacted her to inquire about a T-shirt he had seen in the clip that she knew the video even existed.
In the video, a copy of which was reviewed by the Guardian, Mettra’s face is visible, as are the faces of her two very young children. Though Mettra wasn’t tagged, the video revealed her identifying information: the vintage seller had paid Mettra using Venmo, and her full name was visible on her Venmo profile, which was how the stranger in Philly found her. “I honestly felt extremely violated,” said Mettra, who added that she does not remember seeing an LED light on the glasses.
After making multiple requests for him to take the video down, the seller deleted the post once Mettra warned him that she had contacted Instagram. “Please, for my children and myself I really hope you delete it,” Mettra pleaded in one message to the seller, which was reviewed by the Guardian. The seller didn’t respond to a request for comment but he has posted several similar recordings across multiple Instagram and TikTok accounts, with a tag included in his Instagram captions noting that the videos have been recorded with “Ray-Ban Meta glasses”.
Others say they’ve been harassed by Meta Glasses wearers in spaces they had previously felt safe in. Karina and Kyle, a young couple who asked to be identified by their first names to protect their privacy, are avid ravers who, earlier this year, had a disturbing encounter with a man who was using Meta Glasses to record young women’s bodies at a large EDM festival in Las Vegas.
The couple initially bumped into the man on the dancefloor, where they caught him leering at Karina’s breasts through a pair of Ray-Bans. They were close enough to notice that an LED on the glasses was flashing, signaling that the man was filming. Asked to stop recording, the man stormed away. A little while later, though, they saw the man again. This time, he was sitting on the ground beneath two bikini-clad young women, who were perched on tall barstools as they watched the show. Glasses on, the man stared at their bodies from below. It wasn’t until he took out his phone and attempted to take additional recordings, the couple said, that people around him realised he was recording and notified the women.
Karina is still unsettled by the knowledge that nonconsensual recordings of her may be out there. “It’s really disgusting … there are so many possibilities of what people could do,” she said.
Meta refuted to the Guardian that the main purpose of the glasses is to make unnoticeable recordings. But each victim of nonconsensual recordings called attention to the innocuity of the glasses, and how much more difficult – if not impossible – the glasses were to spot compared with handheld cameras or smartphones. And Mettra, for her part, said she doesn’t remember seeing a recording light. “If he would’ve pulled out a camera, I could have said no, or leave if you’re going to do that,” said Mettra. “It opened my eyes to be a little bit less trusting in people.”
“I feel like that’s the whole point of these glasses,” added Karina, “that they’re inconspicuous.”
‘A red line society must not cross’Being secretly recorded is currently the primary fear associated with Meta Glasses. But covert recordings may just be the first step in a more sophisticated surveillance apparatus integrated with another deeply controversial technology: facial recognition.
In February, the New York Times reported on an internal Meta Reality Labs document in which the company discussed its plans to integrate a facial recognition feature called “NameTag” into its smartglasses.
In the document, dated to May 2025, Meta said that it planned to launch NameTag “during a dynamic political environment where many civil society groups that we would expect to attack us would have their resources focused on other concerns”.
In response to the Times’ reporting, Meta said that NameTag was something it was “still thinking through” and promised to “take a thoughtful approach if and before we roll anything out”.
A few months later, the American Civil Liberties Union (ACLU) issued an open letter to Meta signed by 75 different organizations condemning the integration of a feature like NameTag into smartglasses as “a red line society must not cross”.
By then, though, NameTag was already further along than was publicly known. A June Wired investigation revealed that latent code for NameTag was secretly rolled to Meta smartglasses as early as January 2026. While technically unreleased and inaccessible to consumers, the code contained the architecture for a system that would save faces viewed through Meta smartglasses as biometric “faceprints” and store them on users’ devices.
“You don’t put code like this in your app unless you’re planning to release that feature very soon,” said Cooper Quintin, a security researcher and senior public interest technologist with the Electronic Frontier Foundation Threat Lab, who independently reviewed the NameTag code discovered by Wired.
A few days after it was discovered, Meta quietly deleted the inactive code.
The privacy light embedded within Meta’s smartglasses. Photograph: Carlos Barría/ReutersTechnically, building facial recognition into smartglasses isn’t difficult. In late 2024, two Harvard dropouts were able to embed the facial recognition library PimEyes into a pair of Meta Ray-Bans; coupled with help from a large language model, the glasses were successfully able to connect strangers’ faces to their name, job, social media, address, contact information, information about family members and other personal data. (Meta told the Guardian that “these students simply used publicly available facial recognition software, PimEyes, on a computer that would work with photos taken on any camera, phone or recording device … Meta’s AI glasses do not have facial recognition technology.”)
But just last week, 404 Media reported that Meta filed a patent for a facial recognition feature for its AI glasses that would identify people in the frame and use that information to create highlight reels of that person or people. The example given in Meta’s patent was identifying and creating videos of guests at a dinner party.
According to Kade Crockford, the director for technology and justice programs at the ACLU of Massachusetts, the uncovered NameTag code signals a step toward a radical transformation of our existing privacy landscape – and they’ve “been dreading this moment for 20 years”.
Meta is keen to emphasise that their glasses are uniquely beneficial for blind and low-vision people, many of whom say the tech has been transformational for their daily independence and safety. While discussing NameTag in a recent podcast interview, Meta’s CTO, Andrew “Boz” Bosworth, emphasised that putting facial recognition into smartglasses could offer additional support to people living with vision or memory disabilities.
But the reasons to not introduce unchecked facial recognition into smartglasses are vast, privacy advocates have warned. Citizens attending protests could wind up with their names and faces being sucked into a database. To that end, ICE officers have already been caught using Meta Glasses to surveil demonstrators, and earlier this year, the Department of Homeland Security requested millions in order to build facial recognition into smartglasses. A woman could brush off an advance by a stranger in a bar, or on a bus, or at a workplace, only for that stranger to already know her name, which they may use to find her address and other information. Other vulnerable demographics – LGBTQ+ people, immigrants, people of color – may also be stalked, harassed and targeted by abusers receiving assistance from facial recognition.
Asked about Meta’s facial recognition plans, a spokesperson for Meta said that “we’re exploring these types of features as people regularly express interest in seeing them. Nothing has shipped to consumers and no final decision has been made on what to do here, if anything. If we do decide to roll something out, we will take a thoughtful approach and do so with full transparency. One decision we can be clear about – we are not building a central face database.”
A brewing backlashAs Meta promotes the glasses with paid influencer content and high-profile partnerships, resistance against the tech is intensifying. Activists recently plastered London bus stops with anti-glasses guerilla ads, one of which depicted the infamous pedophile Jeffrey Epstein in the Ray-Bans with the tagline “glasses for people who don’t do consent”. Some glasses owners say they’ve started leaving the spectacles at home because they don’t want to be associated with creeps. A professor in Germany built an app called Nearby Glasses, a free, open-source service that detects when smartglasses are close by and issues an alert. And during a July performance at a music festival in Madrid sponsored by Ray-Ban, the singer Lorde told the crowd that “you don’t know if someone’s wearing sunglasses, or if they’re wearing those fucked-up fucking … can I just say, for the record, fuck the glasses! Don’t get the glasses. Not sexy.”
In early July, Meta announced that it would push an update to detect when an LED light has been “physically tampered with or destroyed” and stop people filming using those glasses. Two months after we spoke, Ghost Metas decided to pause his business as a result of the update. “Too much risk,” said the now former LED disabler. One client, he added, had gotten in touch to say that his glasses were no longer working.
“People use our glasses because they’re genuinely helpful … for those wearing them and the people around them. Trust matters,” a spokesperson for Meta told the Guardian when asked about disabling the LED. “That’s why we built privacy into our AI glasses from the ground up. Every pair has a capture LED that blinks when you take a photo or video that you can save or share, it can’t be turned off, and if someone covers or damages the LED, the camera is disabled.”
But many other LED disablers told the Guardian they’re still working, even after Meta’s update.
“The new update hasn’t been impacting the glasses at all,” said one disabler in early August, after Facebook had announced the update. Since the update, he said he’s tampered with the lights on the Gen 2 and Kylie Jenner models, and that “they work fine.”
“I’ve done hundreds and [only] one person is having problems out of hundreds, so I chalk that up to him being a dumbass,” said another. “Mine are working perfect still.”
A billboard advertising Kylie Jenner’s Meta Glasses collaboration in Los Angeles, California, on 27 June 2026. Photograph: Barry King/AlamyOthers are still able to get by with lower-risk alternatives to physically drilling out the LED – including an Engadget journalist, who found they were able to successfully block out the recording light with a $2 sticker.
Things have gotten so bad that Instagram, which is also owned by Meta, is publicly warning that the glasses are being used to harass people and warns about posting content from Meta Glasses. “If you’re posting content that is taking advantage of people and harassing them, like a lot of these pickup line kind of videos that we’ve heard of and seen, then we’re going to take the content down,” the head of Instagram, Adam Mosseri, said in a video announcing a crackdown on harassing content. “We’re trying to fight that every way we can.”
As part of this purported crackdown, Instagram deactivated the accounts of several pickup artists with large followings. As of publishing this story, however, dozens of pickup artist videos filmed with Meta Glasses are still easily discoverable on Instagram, clearly marked by captions such as “POV MILF RIZZ”, “POV LATINA RUNDOWN” and “POV COLLEGE RIZZ”. After we notified Meta to multiple active accounts dedicated to pickup artist content, the accounts were deactivated.
Though taking pictures and videos in public spaces is generally legal in the US, existing laws regarding two-party consent and wiretapping, particularly on the state level, may have rendered some nonconsensual recordings captured by Meta Glasses illegal. (Of course, victims would generally have to know that recordings exist in order to take action against them.) Even so, the passage of meaningful federal privacy regulation in the US that would take policy out of the hands of corporations, replacing patchworked state laws and setting standards that would shift the regulatory burden to companies instead of individuals.
“The argument for federal privacy legislation is stronger every day, and Congress’s seeming commitment to do nothing is also stronger,” said Quintin. “I think privacy is a human right, and we should expect it. We used to expect it, and I don’t know why we as a society have largely just given up on that. I think we should demand it, and demand that Congress take action and regulate privacy.”
But Meta has proven a market, and other tech companies are chasing. Google has a partnership with Samsung and the designer eyewear company Gentle Monster, and is also working on a collaboration with the affordable glasses-maker Warby Parker. And Apple is not only working on its own glasses, but is also rumoured to be infusing cameras into its popular AirPods designed to feed an AI system information about the wearer’s surroundings, according to Bloomberg. Across Silicon Valley, AI hardware startups – including many designing AI wearables beyond glasses – abound.
Meta itself is mining deeper into higher echelons of luxury fashion. In 2025 it released a limited-edition pair of smart Ray-Bans with the French clothing brand Coperni, and it’s due to release a pair of smartglasses designed in collaboration with Prada. (In February, Zuckerberg even sat front row at a Prada fashion show.) The fashion industry seems excited to make this new era of surveillance as chic as possible.
“We’re frogs in a boiling pot, and the temperature is getting hotter and hotter,” said Clarkson, the lawyer. “So here we have a leap in the erosion of our privacy rights through this slick technology that big tech promises will enrich our lives, make us more connected, smarter, more efficient – when instead it’s going to move us, by an order of magnitude, toward a far more surveilled state of existence.”
In the modern world, anonymity is a precious resource. If smartphones have made constant filming more acceptable, smartglasses are among a class of technologies that make it quieter – omnipresent, but less and less visible.
A pair of glasses suddenly come with endless question marks, and a humming fear that our presence in public spaces involves a Foucauldian forfeiture of privacy. When you feel like anyone could be filming you, you act like you’re always being filmed.
SummaryCompaniesTrial includes claims from 29 states over children's data collection and useJudge rejected Meta bid to block Bejar after dispute over deleted Signal messagesCase is scheduled to last six weeks in federal court in Oakland, CaliforniaAug 19 (Reuters) - A former Facebook engineering director and vocal critic of Meta Platforms (META.O), opens new tab who has accused the company of ignoring internal research on the harm its platforms can cause children and teens will continue his testimony on Wednesday in a trial that could remake Instagram and Facebook.
Arturo Bejar, who worked at Meta from 2009 to 2015 before returning to the company as an independent contractor from 2019 to 2021, is the first witness in a landmark trial over claims brought by a coalition of states accusing the company of designing its platforms to addict young users, misleading the public about their safety and illegally collecting data from users under 13.
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Meta, which denies the states' allegations and says it stands by its efforts to protect teens, has argued that Bejar's opinions are beyond the scope of his work at the company.
Bejar first took the stand at the Oakland, California federal courthouse on Tuesday after each side made its opening statements in the trial, which is currently scheduled to last six weeks.
Bejar, who helped run surveys of teen experiences as part of a team examining well-being on Instagram between 2019 and 2021, said he flagged concerns about the platform's impact on young users to Meta leadership.
Bejar said Meta's internal surveillance was flawed because it focused on the prevalence of content that violated company policies, not how much harm it caused.
He read jurors an email he had sent to Meta's chief product officer Chris Cox, highlighting a supposedly substantial gap between the prevalence that Meta reported and actual harm that users reported.
Item 1 of 3 Arturo Bejar, a former Facebook safety engineer and Instagram consultant, is questioned by states' lawyer Jason Slothouber before U.S. District Judge Yvonne Gonzalez Rogers in a courtroom sketch as Meta faces a landmark federal trial over claims from 29 states that it improperly captured data from minors, designed its social media platforms to addict children, and misled the public about their safety, in Oakland, California, U.S., August 18, 2026. REUTERS/Vicki Behringer.
[1/3]Arturo Bejar, a former Facebook safety engineer and Instagram consultant, is questioned by states' lawyer Jason Slothouber before U.S. District Judge Yvonne Gonzalez Rogers in a courtroom sketch as... Purchase Licensing Rights, opens new tab Read more
"Young people were experiencing harm at extraordinarily high rates," he said. "A parent would have wanted to have known" that reality, he said.
A KEY WITNESSAt the trial, California, Colorado, Kentucky and New Jersey are accusing Meta of designing Facebook and Instagram to hook young users, fueling anxiety, depression and even suicide, and misleading consumers about the platforms' safety. The trial also includes claims from 29 states that Meta violated federal law by improperly collecting and using personal data of children while they used its platforms.
Experts have said the trial is the biggest legal test yet of social media's effects on young users.
Meta is facing thousands of similar lawsuits over alleged harm to children, and Bejar has been a key witness against the company in the three of the cases that have gone to trial so far. One of those cases, brought by New Mexico, resulted in $942 million in damages and penalties and an order requiring Meta to make changes to its platforms in the state.
Bejar has been outspoken about his criticism of Meta’s safety record for children and testified before a U.S. Senate committee in 2023 that the Facebook and Instagram parent company was aware of harassment and other harms facing teens on its platforms but failed to address them.
Meta had unsuccessfully sought to block Bejar's testimony, arguing that he failed to preserve evidence by deleting communications with other former Meta employees on Signal, in part citing comments he made in a still-ongoing Tennessee trial.
U.S. District Judge Yvonne Gonzalez Rogers, who is presiding over the Oakland trial, rejected that effort, calling it a long-shot bid to eliminate a key witness.
Reporting by Diana Novak Jones in Chicago; Editing by Alexia Garamfalvi
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in META over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
California Attorney General Rob Bonta said Tuesday that a federal child safety trial he's co-leading against Meta centers around "civil penalties, restitution and distortion." "This is not a damages case," Bonta said during a press conference following opening arguments on the first day of a trial that could last up to seven weeks.
Brett Arends's ROIEven a loss in the landmark youth-safety trial would do little to hurt Mark Zuckerberg’s empire
Protesters outside the Meta trial in Oakland, Calif., hold a banner displaying the names of about 400 children they say died as result of social-media impacts. Photo: Getty ImagesWill Mark Zuckerberg’s social-media behemoth Meta Platforms get whacked with a legal judgment equal to its entire $1.4 trillion stock-market value?
I sure hope so. If that happens, MarketWatch readers will be able to scoop up the stock at bargain levels.
, the social-media powerhouse behind Facebook, Instagram and one of the biggest artificial-intelligence bets in technology, dropped approximately 3.8% to $547.62 Tuesday morning as investors punished expensive technology stocks and questioned whether Meta's massive AI spending can translate into stronger profits. The decline made Meta the weakest performer among the Magnificent Seven during early trading.
The story is no longer about whether Meta can grow. It can. The real question is whether the company can turn explosive spending into explosive returns. Second-quarter results showed revenue climbing 28% to $60.8 billion, proving the advertising engine remains a monster. But expenses jumped 55% to $42 billion as Meta aggressively expanded AI infrastructure, data centers and research. Operating income fell 8%, earnings declined 13%, and free cash flow dropped to just $784 million after capital expenditures reached $31.08 billion.
Meta's advertising business is still firing. Ad impressions rose 14%, while the average price per ad increased 12%, showing advertisers continue to value access to billions of users across Meta's platforms. The problem is that AI is becoming an expensive race, and Meta is spending at a scale few companies can match. Investors now want proof that these billions of dollars in AI investments will create a new profit engine rather than simply become a permanent drag on margins.
The valuation debate is where the bulls and bears separate. The GF Value chart shows Meta trading at $548.50 compared with a GF Value estimate of $838.91, meaning the stock sits approximately 34.62% below its estimated intrinsic value. For long-term investors, the market may be offering a rare discount on one of the world's strongest digital platforms. But Meta still has something to prove: that its AI ambitions can deliver returns as impressive as the spending behind them.
Mark Zuckerberg’s Meta built its apps to be addictive for kids and then lied to the public about health risks so it could rake in massive profits, a California prosecutor said as a historic federal trial kicked off Tuesday.
A coalition of 29 state attorneys general are trying to force unprecedented changes to how Facebook and Instagram operate as part of the landmark case in Oakland, Calif. The trial could upend Meta’s business model and result in up to $1.4 trillion in damages, according to the company.
Meta’s business model comes down to four simple “H” words, Megan O’Neill of the California AG’s office said in her opening statement, according to Bloomberg: “Hook the user, hold them for as long as they can, harvest their data, and then hide the truth.”
Megan O’Neill, a deputy attorney general for California, makes opening statements before US District Judge Yvonne Gonzalez Rogers in this courtroom sketch on Tuesday in Oakland. REUTERS “The young ones are the best ones – they are the ones most likely to get hooked, they’re the ones that are most likely to make money in the long run,” she added.
Meta, which earns the vast bulk of its revenue from digital advertising, is accused of violating federal law by harvesting kids’ data without parental consent.
The states claim that certain core features of Facebook and Instagram, like the “like button” and recommendation algorithms, are intentionally addictive and have fueled a teen health crisis that includes anxiety, depression, self-harm and even suicide.
O’Neill referenced internal Meta emails as alleged proof of the company’s intentions – including internal chat logs in which Meta employees compared Instagram to a “drug” and said “we’re basically pushers.”
“Meta found the younger a kid is when they start using the app, the better,” the prosecutor said. “The more likely they are to remain a user, the more likely they are to make Meta money in the long run.”
People hold pictures of young people as parents of children and young adults whose deaths were allegedly related to social media use hold a press conference on Tuesday in Oakland. REUTERS Four lead states – Colorado, Kentucky and New Jersey, in addition to California – also allege that Meta misled the public about the extent of those safety risks.
Attorneys for Meta have strenuously denied wrongdoing and accused the state AGs of seeking penalties that far outstrip the scope of their case.
In his opening statement, Meta’s lawyer Paul Schmidt argued that Zuckerberg and his allies have aimed to improve Facebook and Instagram and taken many steps to protect kids online – including parental oversight tools and time limits for social media use.
Mary Rodee, who lost her 15-year-old son after he was targeted in a sextortion plot, was among the protestors who gathered outside the courthouse. REUTERS “You will hear over the course of this case a lot of important issues, issues like teen mental health, issues like social media, issues like how teens use social media,” Schmidt said. “Those are important issues, and they’re issues where Meta believes that it has a responsibility.”
He admitted that Meta’s employees would sometimes use “loose” language behind the scenes, but added that the jury would hear directly about the steps workers took to make the apps safer for kids.
Ahead of the trial, Meta slammed the states’ claims in a fiery statement, asserting that “rather than sticking to the facts or the law, the states have instead decided to chase an outlandish payout.”
Attorney Paul Schmidt arrives before opening statements as Meta faces a landmark trial in federal court on Tuesday, in Oakland. (Manuel Orbegozo) REUTERS The trial is expected to last roughly six weeks, with Zuckerberg and Instagram chief Adam Mosseri each expected to be called to the witness stand.
O’Neill said in a pre-trial hearing that about $200 billion is a more realistic figure for damages that Meta could face if it loses in court. He suggested the company floated the $1.4 trillion for “shock value.”
The state AGs also want a court order forcing Meta to delete any illegally harvested data from kids under age 13 and to stop using algorithms trained on that data. They’re also seeking to bar Meta from using “certain addictive design features” including infinite scroll and autoplay features.
Mark Zuckerberg is expected to testify during the trial. AFP via Getty Images That would be an unprecedented blow to the company, which was ordered to pay nearly $1 billion after losing a similar case in New Mexico, along with part of a $6 million verdict after being found liable for hooking a teen named “KGM” on its apps in California state court.
Critics of Meta’s practices, including some of the families of victims of online harm, gathered outside the Oakland courthouse to protest ahead of the trial. The group included Mary Rodee, a New York resident who lost her 15-year-old son Riley to suicide in 2021 after he was targeted in a sextortion scheme on Facebook.
“They call it spontaneous suicide,” she was quoted as saying by Reuters. “I call it what it was — the predictable outcome of a system that protects corporations instead of children.”
While a jury will hear arguments and render an advisory verdict in the case, it will be up to District Judge Yvonne Gonzalez Rogers, an appointee of former President Barack Obama, to make a final decision on specific damages and potential changes to how Meta does business.
Immigration and Customs Enforcement has prohibited its employees from wearing Meta’s smart glasses, the latest workplace to ban the devices out of privacy concerns.
In a memo about the policy on Tuesday, ICE said it considered the glasses, which can discreetly record video and audio, as a body-worn camera. As a result, “the use of Meta Glasses or similar devices could unintentionally capture, record, or transmit sensitive information, potentially compromising privacy and legal protections,” David Venturella, the agency’s acting director, wrote in the memo.
Under the policy, ICE said employees would be barred from wearing the Meta glasses in the “federal workspace.” The policy applied to all employees, not just its law enforcement officials, the agency said.
“Personally owned body-worn cameras and unauthorized recording are prohibited, as they always have been,” a spokesman for the Department of Homeland Security said in a statement.
Meta declined to comment.
ICE joins a growing number of organizations and workplaces to ban Meta’s smart glasses, which have become one of the company’s best-selling hardware products, even as they have raised privacy and surveillance concerns. Meta debuted the smart glasses in 2021, and has released versions in partnership with companies like Ray-Ban and Oakley.
The glasses feature a small camera above the eye frame that can record video and audio, and they emit a blinking white light while recording. New versions have an artificial intelligence assistant that can respond to voice commands and a project a tiny screen visible to the wearer in the corner of the eye frame.
Last month, New York became the first state to ban Meta’s smart glasses in its court buildings to “ensure that no one can be recorded surreptitiously.” Some retail stores and restaurants have also forbidden the devices, which have spawned an industry of content creators who film inside businesses, often without permission.
ICE does not have a partnership with Meta, but its agents have come under fire in the last year for wearing the company’s smart glasses to protests and during immigration raids. ICE initially told employees the glasses were banned in June, according to an internal email obtained by The New York Times.
In the Department of Homeland Security’s budget proposal in April, the agency requested $7.5 million to develop its own smart glasses prototype to help with immigration enforcement, including glasses that can “enable biometric identification of illegal aliens.”
The Times previously reported that Meta was working on adding facial recognition features to its smart glasses; the company has not made those features available. Privacy groups have raised concerns about facial recognition. In April, the American Civil Liberties Union wrote a letter signed by 77 organizations asking that Meta not include facial recognition in its glasses out of privacy and civil liberty concerns.
“Facial recognition technology built into inconspicuous consumer eyewear represents a serious threat to privacy and civil liberties for every member of our society,” the organization wrote. “Our concerns reflect the fundamental danger of the technology itself.”
The glasses have become a focal point of Meta’s A.I. ambitions. Mark Zuckerberg, the company’s chief executive, has called smart glasses “the ideal form of superintelligence,” a powerful A.I. that the company is investing hundreds of billions to develop.
Meta, which owns Facebook, Instagram and WhatsApp, has heavily marketed new versions of its smart glasses, including with celebrities like Kylie Jenner and athletes who played in the World Cup.
