Morgan Stanley Sees Positive Outlook for Meta Following $18 Billion Legal Settlement
Meta Platforms (NASDAQ: META) has reached a legal settlement worth up to $18 billion over ten years, resolving its youth social media addiction lawsuit. This resolution is expected to remove a major cloud of uncertainty hanging over the company and its stock price. Morgan Stanley analyst Brian Nowak believes this could mark an inflection point for Meta, allowing it to accelerate AI product launches similar to Alphabet's post-antitrust strategy. Nowak anticipates that new products such as agentic advertising tools, subscription services, enhanced versions of Meta AI, and a potential cloud business may significantly boost earnings per share (EPS). He estimates these initiatives could add $10 to EPS over time. In 2025, adjusted EPS was reported at $29.68 while GAAP EPS stood at $23.49. Meta has also made strides in AI model development with the recent release of five new Muse models and a shift toward pay-as-you-go pricing for its most advanced models like Muse Spark 1.3, which is competitively priced compared to OpenAI and Anthropic's offerings.
Topics: AI strategy earnings potential Meta Morgan Stanley regulatory resolution