To The Moon

$Meta Platforms, Inc.(META)$ finds itself at a crossroads again - balancing record-breaking infrastructure investments against a mounting tide of legal challenges that could redefine the social media landscape.

While the company continues to push the boundaries of artificial intelligence (AI) & augmented reality (AR), it is simultaneously preparing for a landmark trial in New Mexico that analysts see as a potential "storm at the horizon" for the entire tech sector or at least those engaged is social media activities.

This trial is particularly dangerous because it seeks to bypass Section 230 of the Communications Decency Act by targeting "product design" rather than content, a legal maneuver that could strip tech giants of their long-standing immunity.

Legal Landmark Trial.

On 30 Jan 30, legal pressure on META intensified as the company prepared to head to trial in Santa Fe.

The lawsuit, spearheaded by Attorney General Raúl Torrez, alleges that META’s platforms—specifically WhatsApp, Instagram, and Facebook, have facilitated sexual exploitation of minors.

Based on court filings, the state intends to present internal communications suggesting that META’s own researchers warned executives about "predatory grooming" as early as 2022, yet safety features were allegedly deprioritized in favor of engagement metrics.

Internal documents cited in the suit estimate that roughly 100,000 children on Facebook and Instagram experience online sexual harassment every single day.

As expected, META has vehemently denied the accusations, relying on its existing safety protocols and First Amendment protections to argue that it cannot be held liable for the criminal actions of third parties.

The stakes are high.

Beyond the $425 million in damages already under appeal from a previous verdict, the New Mexico 8-week trial could :

• Trigger statutory penalties reaching into the billions and

• Court-ordered changes to how META’s social media apps’ algorithms interact with children.

Legal analysts suggest that a loss here could force META to implement mandatory age-verification tools that require government-issued ID, a move that would fundamentally alters user acquisition.

Industry experts predict such a hurdle could slash new teen user acquisition by as much as 15–20% annually, as friction-free sign-ups vanish.

At Google.

The central question for the broader tech market is whether this legal "contagion" will spread to other giants, most notably GOOG’s YouTube.

In late January 2026, a California court moved forward with a "bellwether" trial involving both META and GOOG, signaling that US judiciary is increasingly viewing these companies through the same lens of product liability. (see below)

If the New Mexico court rules that META’s platform design is inherently dangerous, it creates a precedent that could leave YouTube equally vulnerable.

Like META, YouTube is a primary digital destination for children and teens, and it operates under a similar business model driven by recommendation algorithms.

YouTube is already under fire for its "Auto-play" and recommendation algorithms, that critics argue keep minors trapped in "rabbit holes" of increasingly extreme content.

In fact, the US Surgeon General issued a formal advisory in late 2025 noting that adolescents spending more than 3 hours a day on social media, face double the risk of depression and anxiety symptoms.

The fate of GOOG may be inextricably linked to META’s defense - that is if one falls, the other may face a similar "storm" regarding child safety and addictive design.

While YouTube is only one segment of GOOG’s empire, representing roughly 10% of total revenue compared to META’s 98% reliance on social advertising.

Nevertheless, a legal loss would still be a multi-billion dollar hit to GOOG’s growth engine, no?

Strategic Counterweight: AI & Infrastructure

Despite these legal clouds, META is not standing still.

The company’s financial and strategic engine remains robust, characterized by massive investments in the future of computing.

On 27 Jan 2026, META announced a multi-year partnership with $Corning(GLW)$ valued at up to $6 billion. (see above)

• This deal aims to secure the fiber-optic infrastructure necessary to power the next generation of AI data centers across the US.

• It includes the Hyperion complex in Louisiana, that reportedly requires 8 million miles of fiber-optic cabling to support META's AI ambitions.

• This investment is part of META’s broader "Project 2030" initiative, that seeks to make the company entirely self-reliant for its AI hardware needs.

• The aggressive expansion has kept analyst sentiment positive.

As a result, KeyBanc recently increased META’s price target from $835 to $855, citing:

• Productivity gains fueled by AI-driven ad targeting could boost conversion rates by +20%

• Projected revenue surge of over $90 billion between 2025 and 2027.

Other Lawsuits.

On top of all the above activities, META is facing two other lawsuits as well.

META’s Reality Labs segment remains under fire, facing a patent infringement lawsuit from Solos Technology regarding smart glasses as investors weigh (i) the potential of AI-driven monetization against (ii) the risks of courtroom losses.

Solos is reportedly seeking multi-billion-dollar damages and an injunction that could halt sales of Meta’s current AR hardware.

Beyond the US, META is fighting privacy battles in India over WhatsApp’s data sharing, once again confirming regulatory pressure is truly global. (see above)

It is no wonder that analysts’ estimates put META’s 2026 legal and compliance budget at a swelling $5 billion, with the company managing these concurrent fronts, simultaneously.

A Fragile Equilibrium

For investors, META represents a complex trade-off between massive growth and systemic risk.

META - past 5 years performances

The stock has shown resilience, with a 5-year return of +149.62% and a recent monthly gain of +4.9% (as of 10 Feb 2026), yet the "cluster" of legal actions creates a fog of uncertainty, enveloping META.

Ultimately, the outcome of the New Mexico trial and the Solos patent case will do more than just determine META’s share price.

They will set the rules for the next decade of digital interaction.

Whether META and GOOG (YouTube) can weather this storm or will they be forced to dismantle the very algorithms that made them giants remains the most critical narrative for the tech industry in 2026.

Both META and GOOG investors will do well to keep abreast with these legal activities because it just might lead to a crash in either or both tech giants.

Case of ‘Deja Vu’ ?

The current climate feels eerily similar to 26 Apr 2021, when AAPL introduced App Tracking Transparency (ATT) feature in iPhone.

The change required apps like Facebook & Instagram to seek users’ permission to allow tracking of users across apps and websites.

When a user said “no”, the advertising identifier (IDFA) will be wiped out, preventing META from identifying users in the ad data stream, in the previous granular way.

Without the IDFA, Meta could no longer accurately prove to advertisers that their ads were working.

Research showed that conversion-optimized ads saw a dramatic -37.1% reduction in click-through rates (CTR).

This was because over 80% of iPhone users chose to disallow tracking, effectively severing META's ability to identify "high-intent" buyers in the Ad data stream, leading to loss of revenue from advertising income stream.

It also forced in many small merchants, who previously relied on META’s "laser-targeting" to survive, slashing their ad budgets or moving to GOOG.

The extent of financial "damage" was fully realized in February 2022 when META’s CFO Dave Wehner, shared that META lost approximately $10 billion in revenue for FY 2022 alone.

On 3 Feb 2022, following a disappointing earnings report, META stock price plummeted by -26.4% in a single day. (see below)

The crash wiped out roughly $232 billion in market value, the largest single-day loss for any US company in history at that time.

Can a Giant fall twice ?

META’s 2022 crash was a result of a technical blind side by AAPL, where else current 2026 threat has been a slow-moving legal "glacier."

META has proved its ability to pivot; after the 2022 meltdown, with the stock bottomed near $90 /share before surging to current price of $675.

The 2022 "storm" may cause a temporary crash, however META's years of efficiency and $60 billion quarterly revenue base, provided a massive cushion that most social apps lack.

Should META be forced to dismantle the "infinite scroll" and "recommendation AI" to protect minors, we may witness the first true structural decline in social media profitability.

Investors must watch the Santa Fe trial very closely as impending lawsuit threatens to do to user acquisition, what AAPL did to ad tracking.

META - Where Is It Heading ?

Looking at META’s technical indicators to gauge where the stock will be heading next. (see below)

Simple Moving Averages (SMA).

• META is currently exhibiting a "short-term recovery" profile.

• On Tue, 10 Feb 2026, it closed the day at $670.72 /share.

• Sitting above both its 20-day SMA ($659.90) and 50-day SMA ($657.00).

• This signals immediate bullish momentum and a constructive mid-term trend.

• However, META remains in a long-term bear market, trading nearly -2.32% below its 200-day SMA ($686.64), that acts as a formidable overhead ceiling.

• In view of recent US market volatility, with the Dow hitting an all-time-high (ATH) while both S&P 500 and Nasdaq struggling with tech sector outflows, META is likely to follow a "choppy upward" trajectory in the near term.

• It may continue to drift higher toward the $700 level as it benefits from the broader rotation into profitable mega-caps.

• However, any significant rally will likely be capped by the heavy technical resistance of the 200-day SMA.

MACD.

• Its MACD is exhibiting steady bullish momentum.

• The MACD (12, 26) stands at 8.57, remaining firmly in positive territory and currently positioned just above the signal line EMA (9) at 8.53.

• Both the MACD line and signal line are above the zero line, a configuration that reflects a strong underlying uptrend established over recent months.

• The marginal positive divergence (0.05) indicates that upward momentum remains on track , though watching for expansion above 0.10 could confirm acceleration.

RSI.

• META's 14-day RSI at 53.28.

• This indicates neutral momentum, neither overbought nor oversold - suggesting a mild bullish tilt without overstretching.

• This level allows room for upside movement before hitting overbought territory (when RSI is above 70).

In short, META remains in a "bear market rally" until it can bridge the significant gap to its 200-day average.

My viewpoints: (mine only)

Apart from the 3 on-going lawsuits that META is facing, social media apps have been encountering media-tightening policies from different countries for a while now.

Since H2 2025, a wave of "ring-fencing" policies has emerged globally, shifting from merely regulating content to strictly controlling access.

Governments are increasingly implementing "bright-line" age limits and mandatory ID verification to protect minors from addictive algorithms and harmful content.

Below is a list of enforced and soon-to-be enforced policy changes from H2 2025 onwards:

• Like it or not, these changes threaten META and its peers future user pipeline.

• As they are Tech titans with massive cash reserves, recent financial reports suggest that their current revenue will remain resilient.

• The extent of the impact should become clear as 2026 quarterly reports reveal whether their revenue growth is starting to stall.

Despite META’s recent dip, I won’t buy the dip, not when the New Mexico trial has just commenced on 09 Feb 2026. I will wait patiently until the trial is over and verdict out. What about you ?

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• Do you think META will win the New Mexico lawsuit and “save” GOOG in the process ’?

• Do you think META will be able pivot successfully out of Metaverse and into AI, this time?

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