Yesterday, shares of Meta Platforms saw a sharp decline, dropping by approximately 8%, with trading closing below the $550 level for the first time since late April 2025.

Why META Shares Declined

The move was driven by a combination of factors, including:

→ Jury ruling. According to media reports, a jury ordered Meta to pay $375 million for misleading parents about the safety of Instagram and Facebook. The court also found the company liable for developing addictive algorithms that harm teenagers’ mental health.

→ Confirmed capital expenditure (CapEx) for 2026 in the range of $115–135 billion. Significant funds are being directed towards energy infrastructure, including a 6.6 GW nuclear energy deal to power the Prometheus supercomputer. The market may question whether returns on AI investments will justify such large-scale spending.

Sentiment has also been weighed down by reports of plans to cut up to 20% of the workforce. While layoffs are typically viewed positively due to cost savings, in this case they may signal that profit margins are being squeezed more than expected due to AI-related expenditure.

Technical Analysis of META

At the end of January, we:
→ constructed a system of two trend channels;
→ noted that META’s share price had moved above the psychological $700 level.

As it turned out, this was a bull trap formed in the wake of strong quarterly earnings. In early February, the price fell towards the lower boundary of the long-term ascending channel, and by the 13th, that boundary was broken under selling pressure.

As a result, the upward trajectory is losing relevance, giving way to the previously identified descending trend channel. In this context, the bearish breakout zone at $620–640 may now act as resistance, where sellers previously showed strength.

Additionally, it is worth noting that:
→ the psychological $600 level has lost its role as support;
→ yesterday’s candle featured a wide body with a close near the low, accompanied by high volumes — a clear sign of heavy selling pressure.

Against this backdrop, it cannot be ruled out that continued bearish control may push META’s price towards the lower boundary of the red channel.

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