Meta’s shares fell 0.4% in early trading on Friday after the company agreed to a $16.68 billion settlement with 29 state attorneys general, resolving claims that Facebook and Instagram were designed to be addictive to minors.
The settlement, disclosed as the trial opened in Oakland in mid-August, caps Meta’s potential liability at $1.4 trillion, according to the company’s legal assessment. The agreement also mandates nationwide platform changes, including default safety settings for younger users.
Meta’s stock had surged roughly 3.9% in pre-market trading, briefly reaching a session high of $593.27, before paring gains. By midday, shares were down 0.4% at $567.88, following a prior close of $570.05. The stock remains well below its 52-week high of $790.80.
The broader market also weighed on sentiment, with the Nasdaq Composite down 0.2% on the session. Investor focus has shifted to macroeconomic factors, including sticky U.S. inflation data. Core personal consumption expenditures, the Federal Reserve’s preferred inflation gauge, held well above the central bank’s 2% target, tempering expectations for imminent rate cuts ahead of the Jackson Hole symposium.
Analysts at William Blair highlighted a potential $100 billion-plus opportunity in AI agents for Meta, reinforcing the long-term investment case despite near-term headwinds. Nvidia’s upcoming quarterly earnings report, due after the close, is expected to serve as a key barometer for the AI trade, which has been a major driver of tech sector gains this year.
Meta’s legal resolution follows years of scrutiny over its handling of user safety, particularly concerning younger demographics, and comes as the company continues to invest heavily in artificial intelligence and augmented reality initiatives.
