Meta Stock Drops 7.98% to $547 After Legal Blow as $10B West Texas AI Data Center Push Expands

Meta Platforms took a heavy hit on Thursday as Wall Street reacted to a damaging legal setback even while the company’s artificial intelligence ambitions kept getting bigger. The stock closed at $547.14 on March 26, 2026, down 7.98% from the prior close of $594.89. During the session, META opened at $582.53, traded as high as $583.00, and dropped to an intraday low of $543.35, showing just how quickly investor sentiment turned negative.

The move came as traders weighed two sharply different Meta narratives at once. On one side was the legal blow that rattled confidence around future liabilities tied to youth safety and platform design. On the other was a fresh report that Meta is boosting investment in its West Texas AI data center project to $10 billion, a dramatic increase that underlines how aggressively the company is spending to secure long-term computing capacity for artificial intelligence.

Meta’s legal setback became the immediate market trigger

The biggest near-term pressure point for the stock was the California social media addiction verdict that landed just as Meta was trying to hold onto a premium valuation. In that case, jurors found that Meta and YouTube negligently designed their platforms in ways that contributed to a young woman’s addiction and mental health harm. The jury awarded $6 million in total damages and assigned 70% of the responsibility to Meta and 30% to YouTube.

For investors, the significance was not only the dollar figure. A landmark AP report on the California verdict highlighted the broader fear surrounding similar lawsuits that could follow. Markets tend to move quickly when a single legal case starts to look like a template for a much larger wave of risk, and that is exactly the concern now hanging over Meta shares.

The California result also arrived right after another major courtroom blow. In New Mexico, Meta was hit with a $375 million verdict in a separate case involving harms to minors. Put together, the back-to-back cases created the kind of headline pressure that makes investors reassess whether even one of the market’s biggest technology companies could face a more expensive legal environment in the years ahead.

The Texas AI buildout shows Meta is still spending at enormous scale

Even with that legal overhang, Meta’s capital spending story is moving in the opposite direction. Reuters reported that the company is boosting investment in its West Texas AI data center to $10 billion, a figure that instantly makes the site one of the most closely watched pieces of infrastructure in the company’s AI strategy. The report said the new commitment represents more than a sixfold increase.

This matters because AI leadership is becoming a capacity race as much as a software race. Meta is not only investing in models, chips, and tools. It is also pouring money into the physical backbone needed to run those systems at scale. The company previously said its El Paso campus would be an AI-optimized site capable of scaling to roughly 1 gigawatt, giving investors a clearer picture of just how large the project could become over time.

That makes Thursday’s stock drop especially notable. Normally, a $10 billion AI infrastructure commitment would be viewed as an aggressive growth signal. Instead, the legal shock dominated the session, suggesting the market is worried that expanding AI ambitions may not be enough to offset fresh litigation concerns in the short term.

Why valuation debate is getting harder around META stock

Meta has spent much of the past year benefiting from investor confidence in big-tech earnings power, AI upside, and operating discipline. But Thursday’s selloff showed how quickly that premium can be challenged when legal risk becomes impossible to ignore. A stock that closed at $594.89 the day before suddenly finished at $547.14, a one-day decline of $47.75 per share. That kind of move forces the market to ask whether Meta should still trade like a pure AI and advertising growth story or whether a legal discount now deserves more weight.

The answer is not simple. Bulls can still point to Meta’s enormous reach, strong ad machine, and willingness to spend aggressively on future infrastructure. Bears can point to a more uncertain liability landscape, especially if other cases begin to follow the California verdict and push the company into a longer cycle of legal defense, reputational damage, or operational changes.

The trading range on Thursday captured that tension perfectly. Even after opening above $582, the stock could not hold up under the weight of the headlines and eventually fell to $543.35 intraday before settling a little higher. That kind of wide swing often signals a market wrestling with more than one narrative at once, and Meta now clearly has both a massive AI buildout story and a rising legal-risk story competing for investor attention.

West Texas gives Meta a long-term growth angle even as near-term risk rises

There is also a strategic reason the West Texas project matters beyond the headline number. AI data centers are no longer side projects for large technology companies. They are becoming central assets tied to product speed, model performance, advertising efficiency, recommendation systems, and future monetization. By raising the Texas commitment to $10 billion, Meta is signaling that it wants to remain one of the companies with the scale to compete at the top tier of the AI race.

That long-term ambition may eventually support the stock again, but on this trading day it was not enough to stop the slide. The market chose to focus on the courtroom damage first and the AI payoff later. For now, META sits in a more complicated position than before: still one of the biggest AI spenders in tech, but also facing a sharper legal spotlight that investors can no longer dismiss as background noise.

That is what makes the stock so closely watched after this drop. Meta is trying to build the infrastructure for its next era of growth while defending itself against cases that could reshape how investors price its future. Thursday’s close at $547.14 reflected that clash in full view, with the legal blow overpowering even a $10 billion push into West Texas AI infrastructure.