Meta Navigates EU Crackdown and $50 Billion Louisiana Bet as Stock Rebounds

EU regulators hit Meta with DSA violations over addictive design and force chatbot reinstatement, as Meta boosts AI capex to $145B, lifting stock 9.7%.

Meta Platforms is steering through a period of stark contradictions. European regulators are tightening the screws on the company’s social media operations, hitting it with a preliminary finding that Instagram and Facebook violate the Digital Services Act through allegedly addictive design features, while simultaneously forcing it to reinstate rival chatbots on WhatsApp. Yet even as these regulatory headwinds intensify, the tech giant is plowing record sums into artificial intelligence infrastructure, lifting its 2026 capital-expenditure forecast to between $125 billion and $145 billion — a move that has helped lift the stock from its recent lows.

The EU Commission’s preliminary determination on July 10 singled out infinite scroll, autoplay, push notifications and personalized recommendation systems as likely contravening the DSA’s systemic-risk provisions. Under the proposed remedy, Meta would be required to disable autoplay and infinite scroll by default, introduce screen-time breaks and recalibrate its recommendation logic away from maximum user engagement. A final confirmation could trigger fines of up to 6% of global annual revenue. The backdrop is similarly fraught on the competition front: on June 9 the Commission imposed emergency measures under Article 102 TFEU, forcing Meta to restore access to ChatGPT and other third-party chatbots on WhatsApp across the European Economic Area, which it had blocked on January 15. After a brief experiment with a per-message fee ranging from €0.049 to €0.13 — deemed by Brussels to be a de facto ban — the company relented, and ChatGPT returned on July 13. Given WhatsApp’s roughly 500 million monthly active users in the region, the stakes are enormous.

While regulators demand restraint, Meta is spending with abandon. The centerpiece of its AI offensive is a data-center complex in Richland Parish, Louisiana, now slated to reach 5 gigawatts of capacity at a cost that has nearly doubled from an initial $27 billion to more than $50 billion, making it one of the largest single AI-infrastructure projects on the planet. The company aims to double its total AI compute capacity from 7 gigawatts this year to 14 gigawatts by 2027. To reduce dependence on external suppliers such as Nvidia, Meta is developing its own AI chip, codenamed “Iris,” in collaboration with Broadcom and Taiwan’s TSMC, with a planned launch in September. On July 9, it also debuted Muse Spark 1.1, an updated AI model from Meta Superintelligence Labs designed for agent-based tasks and software debugging. A new cloud-computing unit will rent out surplus capacity to outside clients, signalling a shift toward monetizing the massive infrastructure. The first-quarter capital spend alone reached $19.8 billion, partly funded by a $25 billion bond issuance in late April, while headcount fell by 1% to 77,900 after a round of layoffs in May.

The shares have responded positively to the AI narrative, closing at €579.20 with a weekly gain of 9.74% and a monthly rise of 13.17%. Year to date the stock is up 4.32%, though it remains 5.41% lower than 12 months ago and 14.55% below the 52-week high of €677.80 touched in July 2025. The relative strength index stands at 65.2, signaling a stretched but not overbought position, while the annualized 30-day volatility of 49.41% keeps the risk of sharp swings elevated. The company will report second-quarter results after the market close on July 29, offering the first concrete look at how the spending spree is affecting the income statement.

Analysts have maintained a cautiously optimistic stance, with a consensus “Moderate Buy” rating and a price target of $835.90 according to MarketBeat. Yet insider activity tells a more cautious story: the chief operating officer, chief financial officer and other insiders sold a combined $24.6 million in Meta stock over the past three months. Legal clouds also persist. Meta is appealing a $375 million judgment in a New Mexico addiction-related lawsuit, while 26 former employees have filed a separate suit alleging that the company used AI tools to make termination decisions. For investors, the equation remains a high-wire act between record-setting AI investment, swelling regulatory pressure and unresolved litigation.