Meta Stock Crashes 30% – Why the Tech Giant Is Under Pressure
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Key Takeaways
- Meta stock lost around 30 percent in value since its 52-week high of $796.25 in August 2025.
- Advertising revenues increased by 24 percent in the fourth quarter of 2025, but historically high capital expenditures for AI infrastructure burdened earnings.
- The business model is becoming increasingly capital-intensive as Meta heavily invests in data centers, AI chips, and computing capacity.
- Regulatory uncertainty in the EU and the USA is further damaging investor confidence.
- The average of 42 analysts stands at $835.60, representing upside potential of more than 45 percent.
- Technical indicators show a clear sell signal following the multi-month correction since August 2025.
Meta Platforms' stock is in a pronounced correction phase. In early April 2026, the price sits around 30 percent below the 52-week high of $796.25 that the tech conglomerate reached in August 2025. Since the start of 2026 alone, the stock has lost about 13 percent in value. For investors, the question arises: how can a stock decline so sharply when its business appears to be booming?
Advertising business grows strongly – costs grow even faster
Meta is recording impressive growth in its advertising business in the current fiscal year. Advertising revenues increased by 24 percent in the fourth quarter of 2025. Management has even signaled even higher growth rates for the current quarter. This is driven primarily by AI-powered advertising systems and aggressive monetization of Reels and WhatsApp.
Yet that is precisely where the problem lies: while revenues are rising, spending is exploding. Meta is investing massively in infrastructure – data centers, AI chips, and computing capacity are consuming billions. Capital expenditures (Capex) are reaching historic highs. The business model is becoming increasingly capital-intensive, which is burdening profitability. In the latest quarterly results, earnings fell by around three percent despite rising revenues.
Regulatory uncertainty takes a toll
Added to this are legal and regulatory risks. Meta itself points out in its investor communications the potential burden from tightened regulation in the EU and the USA. These uncertainties are likely to further damage investor confidence.
Technical analysis signals downtrend
From a technical perspective, the stock has entered a multi-month correction following the August high. Technical indicators show a clear sell signal, although some analysts point to potential support zones that could allow for a short-term recovery.
Analyst opinions diverge
Despite recent weakness, part of the analyst community remains optimistic. Cantor Fitzgerald, for example, confirmed its "Overweight" rating with a price target of $660. The average of 42 analysts stands at $835.60 – a potential increase of more than 45 percent from current levels. The market capitalization as of early April 2026 is around $1.45 trillion.
Assessment for retail investors
Meta faces a classic dilemma: to keep pace in the AI race, the company must invest enormous sums. Whether these investments will pay off in the long term remains open. For investors, this means heightened uncertainty. Those invested in Meta or considering entry should closely monitor the development of the cost structure and regulatory developments. The current correction shows: even seemingly secure tech giants are vulnerable to structural challenges.