Leadership Shifts and Regulatory Challenges Weigh on Meta’s Stock

Meta US30303M1027

Meta Platforms Inc. concluded the trading week in negative territory, a notable underperformance against a broader market rally. While technology peers like Nvidia posted significant gains, Meta's shares declined by nearly 0.9% on Friday, closing at $658.49. The pressure stemmed from a confluence of factors: an abrupt board departure, a revised price target from a major analyst firm, and fresh regulatory setbacks in Europe.

Coinciding with the boardroom news, investment firm Wedbush made a notable adjustment to its outlook for Meta. Analyst Scott Devitt reaffirmed the firm's "Outperform" rating but lowered the price target from $920 to $880 per share. In its rationale, Wedbush continues to view Meta as a top selection in the digital advertising space for 2026, citing the strength of its AI-powered "Advantage+" tools. The target reduction, however, reflects anticipated margin pressures from the company's escalating investments in artificial intelligence infrastructure.

The analyst community's overall stance remains overwhelmingly positive. Of the 95 analysts covering the stock, 93 maintain a buy recommendation, with a consensus average price target hovering around $790.

High-Profile Board Member Departs After Brief Tenure

A significant development emerged from Meta's corporate governance. Dina Powell McCormick resigned from her position on the company's board of directors, a move that came just eight months after she joined in April 2025. McCormick, a former deputy national security advisor under President Donald Trump, had taken a board seat alongside Stripe co-founder Patrick Collison. According to SEC filings, Meta does not currently plan an immediate replacement. Reports suggest McCormick may continue to serve the company in an advisory capacity on strategic investment matters. Nevertheless, the sudden exit of a prominent director after such a short period raises questions about boardroom stability.

Legal and Regulatory Headwinds Intensify

Adding to the day's challenges were new legal developments on both sides of the Atlantic. In Europe, Austria's Supreme Court ruled that Meta's personalized advertising practices violate European Union law. Separately, in the United States, the company agreed to a $50 million settlement with the state of California. This settlement resolves allegations concerning misleading data privacy practices that occurred between 2010 and 2018.

Internal Friction Reported Over AI Direction

Beneath the surface, tensions appear to be simmering regarding Meta's crucial artificial intelligence strategy. A Financial Times report on Friday highlighted friction between CEO Mark Zuckerberg and Alexander Wang, the founder of Scale AI. Wang was hired in June 2025 to lead core AI initiatives, but internal accounts point to cultural clashes and what has been described as a "stifling" management style. This reported discord presents a potentially volatile situation given the company's massive, multi-billion dollar push into AI.

Despite these internal dynamics, development continues at pace. TechCrunch reports that Meta is working on new AI models under the codenames "Mango" for image and video, and "Avocado," a large language model. Both are slated for release in the first half of 2026.

Market Context and Financial Foundation

Friday's stock weakness stood in stark contrast to the broader market advance. The S&P 500 index gained 0.9%, while the Nasdaq Composite rose 1.3%. Meta shares currently trade approximately 17% below their 52-week high of $796.21.

The company's underlying operational performance, however, remains robust. For the third quarter of 2025, Meta reported revenue of $51.24 billion, representing a 26% year-over-year increase. The critical question for investors is whether the company can successfully monetize its enormous AI investments without significantly eroding its profit margins.