Meta Platforms is currently embroiled in legal battles over allegations that it has contributed to addictive behaviors in children, which has negatively affected its stock performance.
Bank of America analysts advise investors not to let these legal issues overshadow the company's long-term growth potential, maintaining a buy rating with a price target of $810, suggesting a 45% upside from its current price of around $560.
The ongoing trial, initiated by 29 state attorneys general, could lead to substantial financial penalties and operational changes, but the analysts believe that the jury's advisory role and the judge's previous dismissals of certain claims may mitigate the risks.
They argue that establishing a direct link between Meta's platform features and alleged harm to youth will be challenging for the plaintiffs.
While some analysts draw parallels to the historical lawsuits against Big Tobacco, which resulted in significant financial repercussions, Bank of America remains optimistic about Meta's valuation, particularly due to its advancements in artificial intelligence.
The company generates over 90% of its revenue from advertising, and any mandated changes to its engagement features could impact user interaction and revenue generation.
Despite the current volatility in Meta's stock, which has seen a 26% decline in 2026, the potential for AI-driven growth and the company's strategic initiatives, including plans for a cloud business, suggest that long-term investors may still find value in holding Meta shares