Meta Platforms (META) Stock: Is the Social Media Empire at Risk of Being Dismantled?

TLDR

• Federal Trade Commission has begun an antitrust trial against Meta, seeking to force divestiture of Instagram and WhatsApp
• Mark Zuckerberg took the stand Monday, facing questions about emails suggesting he preferred to “buy not compete”
• Meta stock remains near all-time highs despite the legal challenge, with most analysts maintaining “Buy” ratings
• Bank of America analyst maintains $640 price target, seeing the legal risk as manageable
• Average analyst price target for META is $733.67, implying 38% upside potential

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The Federal Trade Commission’s antitrust trial against Meta Platforms kicked off this week, representing what many call the biggest monopoly fight in tech since Microsoft’s case in the 1990s. CEO Mark Zuckerberg appeared in court Monday to defend his company against allegations that it built a social media monopoly by purchasing competitors rather than competing with them.

The trial centers on Meta’s acquisitions of Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion. FTC lawyers presented evidence including internal emails where Zuckerberg wrote statements like “it is better to buy than compete” in 2008.

The case could have far-reaching consequences. The FTC is seeking a court order forcing Meta to divest both Instagram and WhatsApp, which would fundamentally reshape the company.

Zuckerberg reportedly lobbied President Trump to settle the case before the trial began. He now finds himself in a Washington, D.C. courtroom defending his business strategy from over a decade ago.

The Case Against Meta

The government’s key argument involves Meta’s alleged “buy-or-bury strategy” for potential competitors. FTC lawyers presented emails showing Zuckerberg’s concern about Instagram as early as 2011, when he described it as “a large and viable competitor” in mobile photos.

Another acquisition highlighted by prosecutors was Google’s social app “Glancee,” which Facebook purchased in 2012 after Google shut it down. The FTC claims this move was meant to block Google’s social networking plans.

The government contends these purchases gave Meta unprecedented user surveillance capabilities and helped the company dominate online advertising, which powers digital social platforms.

Meta’s defense team argues the FTC has misidentified the market. They say the government’s definition of “personal social networking” incorrectly excludes platforms like TikTok, YouTube, X, and LinkedIn.

A Meta spokesperson stated: “The evidence at trial will show what every 17-year-old in the world knows: Instagram, Facebook, and WhatsApp compete with Chinese-owned TikTok, YouTube, X, iMessage, and many others.”

Financial Stakes

If the FTC prevails, the financial impact would be substantial. Instagram generated $32 billion in U.S. ad revenue for Meta in 2024, accounting for 48.4% of total revenue according to Emarketer. The research firm projects Instagram’s share will exceed 50% in 2025.

WhatsApp contributes much less to the bottom line, with its business messaging service earning $1.7 billion in 2024.

Despite these high stakes, META stock remains resilient. Shares continue trading near all-time highs, suggesting investors aren’t overly concerned about the legal challenge.

Analysts Remain Bullish

Wall Street analysts largely maintain optimistic outlooks on META. Bank of America’s Justin Post kept his Buy rating and $640 price target, writing that “while the FTC’s case presents some tail risk, the likelihood of a final resolution is distant, with potential appeals extending the timeline until 2027.”

Post believes Meta’s family of apps will likely stay intact, noting the market hasn’t priced in major penalties. Overall, analysts maintain a Strong Buy consensus rating based on 42 Buys, three Holds, and one Sell.

The average META price target stands at $733.67, suggesting a potential 38% upside from current levels. META stock has gained more than 5% over the past year despite the legal cloud.

Judge James Boasberg, who is overseeing the case, previously dismissed the FTC’s initial complaint but later accepted an amended version. Legal experts note that while Boasberg is willing to hear the FTC’s theory, he appears skeptical of their market definition.

Paul Swanson, a partner at Holland & Hart and head of the firm’s antitrust practice, observed: “It seems like already there’s some concern from the court that the market we’re talking about is too narrowly drawn. The judge has not signaled that he’s on board with their narrative.”

Even with a favorable ruling for the FTC, any final resolution would likely take years, with appeals potentially extending the process until 2027 or beyond.

Investors seem to be betting that Meta’s growth in areas like Threads, artificial intelligence, and WhatsApp Business will continue regardless of the legal proceedings.

The trial continues with more testimony expected in the coming days. For now, META stock trades at $531.48, down 2.22% in the most recent session but showing a slight 0.30% gain in pre-market trading.

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