Why Meta (META) Stock Is Trading Lower Today

What Happened?

Shares of social network operator Meta Platforms (NASDAQ:META) fell 3.1% in the morning session after The Information reported that the company is planning its fourth overhaul of its artificial intelligence operations in six months. This report likely raised concerns among investors about the stability and direction of the company's AI strategy. The news comes after a period of significant growth for Meta, driven in large part by optimism surrounding its AI initiatives.

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What Is The Market Telling Us

Meta’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 14 days ago when the stock gained 3.5% on the news that analysts raised their price targets on the stock, following the company's strong second-quarter earnings report the previous week. The technology giant reported that its second-quarter revenue grew 22% year-over-year to $47.52 billion, while its earnings per share jumped 38% to $7.14, both beating Wall Street estimates. Management attributed the strong performance to artificial intelligence unlocking greater efficiency across its advertising system. Following the impressive results, Barclays increased its price target on the stock to $810 from $640, and other investment firms also issued more optimistic reports. Also, a surprisingly weak July jobs report fueled expectations that the Federal Reserve would cut interest rates to support the economy. Data released on Friday showed the U.S. economy added only 73,000 jobs in July, significantly below forecasts, with downward revisions to previous months compounding concerns of a slowdown. This weaker-than-expected economic data is paradoxically lifting investor spirits. The logic follows a 'bad news is good news' narrative, where a faltering labor market could compel the Federal Reserve to act sooner to stimulate the economy. Following the report, the probability of an interest rate cut at the Fed's September meeting surged, with the CME FedWatch tool indicating traders now see an 85% chance. Lower interest rates generally reduce borrowing costs for companies and consumers, which can encourage spending and investment, thereby boosting stock prices. The rally comes after a sharp sell-off last week driven by the same jobs data and new tariff announcements.

Meta is up 28% since the beginning of the year, and at $767.03 per share, it is trading close to its 52-week high of $790 from August 2025. Investors who bought $1,000 worth of Meta’s shares 5 years ago would now be looking at an investment worth $2,924.

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