Meta’s stock sell-off deepened in November as fund managers and Wall Street firms began flashing the AI bubble warning.
- The stock is experiencing a downtrend within a consolidation phase that began in late October.
- Cantor Fitzgerald analysts on Wednesday cut their price target for Meta stock to $720 from $830.
- They blamed the action on Meta’s higher operating expenditure.
Meta Platforms, Inc. (META) stock has closed lower in each of the past four sessions and has lost over 22% from its recent high of $759.15, set on Oct. 29. The sell-off was set in motion by investor fears concerning a hit from a potential artificial intelligence (AI) bubble burst.
When a stock pulls back 20% or more from a recent high, it is said to be in bear-market territory, and by that definition, Meta’s stock is now in a bear market.
Meta Stock Unravelling?
Since bottoming along with the broader market in October 2022, Meta’s stock was in an uptrend until late February. Since then, it has been in a consolidation phase, though it hit an all-time high of $796.25 in mid-August.
The stock is currently in a downtrend within this consolidation range, which began when it gap-opened following the release of its third-quarter results in late October.
Source: Koyfin<
The post-earnings sell-off came as the Trump administration legislation increased Meta’s tax provisioning, but the Mark Zuckerberg-led company downplayed it as a one-time event, even touting the likelihood of a significantly lower tax bill for the remainder of the year and future years.
Burry Joins Bearish Voices
Meta’s stock sell-off deepened in November as fund managers and Wall Street firms began flashing the AI bubble warning.
“Big Short” fame Michael Burry named Meta, along with Oracle, among hyperscalers, which have been extending the useful life of AI infrastructure, boosting earnings in the process. “By my estimates, they will understate depreciation by $176 billion 2026-2028,” Burry said of the hyperscalers as a group. “By 2028, ORCL will overstate earnings 26.9%, META by 20.8%, etc. But it gets worse.”
Taste Of Its Own Medicine?
After vigorously poaching key AI personnel from small startups and megacap tech peers, Meta is now beginning to get a taste of its own medicine. Yann LeCun, who served as Meta’s VP & Chief AI Scientist, has confirmed that he planned to leave the social media giant. In a LinkedIn post, LeCun said, “As many of you have heard through rumors or recent media articles, I am planning to leave Meta after 12 years: 5 years as founding director of FAIR and 7 years as Chief AI Scientist.”
The Meta Stock
Notwithstanding, Meta’s recent pullback, retail investors on Stocktwits aren’t yet ready to jump on the bullish bandwagon. Sentiment remains ‘neutral’ as of early Thursday, and the message volume on the stream also stayed ‘normal.’
A Stocktwits watcher pointed out that no Meta large language model is at the top of its category on the AI leaderboard. “$GOOG and Grok are crushing it, though,” they said.
A bearish user said Meta is a strong sell and that the stock will likely hit $400 by the year’s end.
A bullish watcher, however, said, “$META should never have fallen to this level. People don’t realize spending is needed to grow. Zuck knows what he’s doing.”
“Sad thing is that ppl needed to hear it from another company. AI is the future. Ride this wave to the new highs. 2026 going to be a great year.”
The 14-day relative strength index (RSI), a momentum indicator, suggests Meta stock is a screaming buy, with the indicator sporting a reading of “23.2.” That said, the technical picture isn’t very pretty, as the stock traded below all key simple moving averages (SMAs), with the longer-term 100-day SMA trading above the 50-day SMA. The stock has been making more lower lows in the current downtrend, suggesting intense selling pressure.
Wall Street analysts aren’t hitting the panic button yet. According to Koyfin, out of the 68 analysts covering the stock, 59 have ‘Buy’ or ‘Strong Buy’ ratings, eight remain on the sidelines (‘Hold’), and one is in the bearish camp with a ‘Sell’ rating. The average price target for the stock is $841.42, implying scope for over 40% upside.
On Wednesday, Cantor Fitzgerald analysts cut their price target for Meta stock to $720 from $830, while maintaining an ‘Overweight’ rating. The analysts cited higher operating expenses flagged by the company for 2026. Cantor views the recent $40 billion+ agreements with four cloud vendors as likely adding roughly $4 billion in incremental costs, creating potential headwinds for 2026 despite some timing uncertainty tied to capacity rollout.
Meta’s stock is down about 9% this year.
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