Meta Stock Price Drops Nearly 8% in One Day — And It’s Not Just About a Jury Verdict

On Wednesday afternoon, March 25, Mark Zuckerberg left the Capitol Hill office of Senate Majority Leader John Thune, appearing to have accomplished his goal. In the widely shared photo, he was dressed in a dark suit, calm, and devoid of any obvious weight that one might anticipate from a CEO whose business had recently been named in a historic trial for social media addiction. Twenty-four hours later, Meta’s stock closed at $547.54 on volume that more than doubled the 65-day average after falling by almost $47 per share, its worst single-day decline in months. Zuckerberg may have generated goodwill during those congressional meetings, but it didn’t return to Menlo Park in time.

A Los Angeles jury’s decision that Meta and Google’s YouTube were negligent for creating addictive platforms and that the companies purposefully created systems that negatively impacted the mental health of young users served as the immediate catalyst. In the first case, jurors awarded $6 million in damages, which is essentially a rounding error for a business that makes $200 billion a year. However, the specific payout is not as important as the legal framework. Wall Street pundits were making the obvious analogy: this is similar to what happened to tobacco companies during the initial rulings, prior to the industry realizing the true costs of large-scale litigation. It’s genuinely unclear if Meta’s circumstances will go in that direction, but investors typically reprice risk without waiting for confirmation.

On the same day, the stock had to absorb additional pressures. As Middle East tensions persisted, oil prices surged back above $100 per barrel, driving up Treasury yields and causing the kind of widespread Nasdaq selloff that doesn’t really differentiate between fundamentally strong and fundamentally weak companies. With a beta of 1.28, Meta amplifies broad market movements; a stock like META typically declines more sharply during a session in which the Nasdaq fell 2.38%. Meta lost almost 8%, far more than the Communication Services sector’s 2.97% decline. Meta lost more than $47 per share in a single session by the time the New York closing bell rang at 4 p.m.

Here, it’s difficult to ignore the timing. Meta paid its first quarterly dividend of $0.525 per share, the start of an annualized $2.10 payout that puts a yield of 0.38% on the stock at current prices, on the same day that it suffered one of its worst losses in months. That dividend is about as sustainable as dividends get in the tech industry for a company with an 8.81% payout ratio and the type of cash generation Meta generates. However, the gesture felt less like a reward and more like background noise against the noise of a courtroom verdict and a market selloff because it came on what was arguably the worst day to be a Meta shareholder in recent memory.

Beneath all of that, however, the underlying picture hasn’t changed overnight. Revenue for the fourth quarter of 2025 was $59.89 billion, up almost 24% from the previous year. EPS exceeded projections by 8.6%. During that quarter, net income growth exceeded 34%. Analysts following the stock have been increasing their 2027 EPS projections; Erste Group specifically cited cost discipline, better ad tools, and quicker AI monetization as the reasons for the increase. At $862.60, the one-year analyst price target indicates a more than 50% increase from the current price. That goal was based on a company that is doing remarkably well financially. There is a new legal risk. With capital expenditures accounting for almost 35% of revenue, the AI spending trajectory is not.

Trefis examined Meta’s past performance during significant market crises and discovered that, in contrast to the S&P 500’s average 13% decline under similar conditions, the stock falls an average of 31% during geopolitical and sovereign risk events. META fell precisely 31% as a result of the 2025 tariff shock, while the overall market fell 19%. It dropped 71% during the 2022 inflation bear market. Although these figures are unsettling, they are also somewhat instructive: Meta’s volatility during times of crisis is a known characteristic of the stock, not a shock. Generally speaking, investors who have persevered through those fluctuations have reaped rewards. In just the last 12 months, the stock has increased by more than 82%.

There is a version of the upcoming weeks in which the macroenvironment stabilizes, the legal picture becomes clearer, the April 29 earnings report is released with solid numbers and prudent capex guidance, and META recovers a significant amount of what it lost on Thursday. There is also a version in which additional rulings in comparable addiction cases result in a persistent legal overhang that compresses the multiple and necessitates a lengthier rerating procedure. Both are currently active. Investors who have witnessed the legal reckoning of the tobacco industry are aware that the initial ruling is typically not the final one and that, if the underlying business is robust enough, companies can endure and even prosper through years of litigation. It is Meta’s. The cost of defending it is the question being priced on Thursday.