Meta Loses Two Jury Verdicts in One Week — Can Its Ad Machine Outrun a Litigation Tsunami and a $135 Billion Spending Binge?

Shares of Meta plunged $16.72 to $530.82 on Friday, extending a brutal week that has erased 13.7% of the company's value as back-to-back courtroom defeats collide with deepening anxiety over runaway AI spending.

• Two Verdicts in 48 Hours Invite Comparisons to Big Tobacco. On March 24, a New Mexico jury ordered Meta to pay $375 million — making the state the first to prevail at trial against a major tech company over child safety.

Just one day later, a California jury found Meta and YouTube liable on all seven counts in an addiction case, awarding $6 million in damages. The dollar amounts are trivial against $201 billion in 2025 revenue, but the precedent is not. The California case is a bellwether — a test case — tied to roughly 2,000 pending lawsuits from parents and school districts.

With thousands of suits pending, the outcomes could redefine how platforms are held accountable and force costly design changes to apps used by billions.

• Plaintiffs Found a Legal Strategy That Works Around Tech's Shield. Lawyers focused on "the design of the system," sidestepping Section 230, the 1996 law that protects platforms from liability for user-posted content. That blueprint gives future plaintiffs a roadmap. A second phase begins in May, when a judge will decide whether Meta must change its platforms and pay additional penalties.

More trials — including a major federal case and another state trial — are scheduled for this summer.

• A $135 Billion AI Spending Plan Is Compounding Investor Doubt. Meta has guided 2026 capital expenditures at $115–$135 billion, nearly double the $72.2 billion record set in 2025.

The company just inflated a single Texas data center's budget from $1.5 billion to $10 billion — a 567% jump mid-construction.

Morningstar is now modeling a margin collapse in 2026 as AI costs rise faster than revenue. Investors want proof that this spending translates into profit, not just processing power.

• The Stock Is Pricing In Risk, But the Litigation Calendar Is Just Starting. Meta's valuation has slid to roughly $1.84 trillion, placing it behind both Alphabet and Nvidia, reflecting growing skepticism over near-term AI returns. The combination of open-ended legal liability and capital spending with uncertain payoffs creates a two-front squeeze on sentiment that could persist well into 2027.