3 Reasons Meta Has Turned the Corner

Meta Reaches Landmark Lawsuit Settlement

One of the biggest headwinds for Meta Platforms’ (META) stock has been a massive, multi-year bipartisan lawsuit that accused the company of knowingly deploying addictive and harmful product features on its social media platforms. The lawsuit, which included 47 state attorneys general, Washington, D.C., and several U.S. territories, accused Meta of harmful practices that induced addictive behavior, such as algorithmic feeds that drove endless “doom scrolling” and constant push notifications that harmed the mental health of teenagers, children, and young adults.

Because state consumer protection laws allow states to seek civil monetary penalties for each violation, the lawsuit was initially seeking up to a staggering $1.4 trillion. However, in late August, Meta reached a settlement that included algorithm changes, enhanced age verification, and daily screen time caps on Facebook and Instagram for teen accounts. Meta also agreed to an $18 billion payout over ten years. Not only was the settlement far less than initially feared, but investors can also now put this bearish headwind in the rear-view mirror.

Meta Muse has Strong Debut

Meta Muse is Meta’s autonomous personal artificial intelligence agent launched on September 8, 2026. Muse is an agentic AI platform that can perform real-world tasks on the user’s behalf while operating in the background across connected apps. Muse can perform tasks such as online shopping, travel booking, sending emails, and filling out complex forms. Muse can also convert Instagram reels such as recipes into actionable grocery lists. Additionally, Muse integrates with several popular services, including Spotify (SPOT), Google (GOOGL) Gmail, and OpenTable. Wednesday, Meta shares spiked after the company said Muse usage has “blown way past our projections,” with users engaging 10x more than its test cohorts. Muse also reached the top 5 in the App Store in under 24 hours, proving that Meta’s consumer AI push is beginning to bear fruit.

Meta Earnings Growth Returns

In 2025, Meta’s annual earnings growth slowed for the first time in three years. However, Zacks Consensus Estimates suggest a return to annual earnings growth in 2026 and 2027.

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Bottom Line

After a successful agentic AI debut and a favorable, high-stakes multi-year legal settlement, Meta Platforms has finally turned the corner. With core regulatory risks now in the rearview mirror and new revenue catalysts taking hold, Meta is well-positioned to restore earnings growth and reinforce its technology leadership role.

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This article originally published on Zacks Investment Research (zacks.com).

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