Meta Platforms (NASDAQ: META) stock has fallen sharply in recent months, sliding from its record high of $796 in August last year to $562. Although the decline has left the company looking increasingly undervalued, downside risks remain, and the stock could face further weakness in the near term.
Meta Platforms stock price crashes amid AI fears
Meta, the parent company of Facebook, Instagram, and WhatsApp, has been in a strong downward spiral in the past few months. This retreat has coincided with that of other companies like Amazon and Microsoft.
Meta has dropped because of the ongoing data center spending that has continued soaring this year. In its recent earnings report, the company said that it would spend over $145 billion in capital expenditure this year, up from the previous estimate of $125 billion. This increase was mostly driven by chip price increases amid the ongoing global shortage.
The company is spending all this money to make its Meta AI solution more competitive. Still, there are concerns that the platform, despite being on all the billions of devices, has not gained market share yet.
A recent report showed that ChatGPT maintains the biggest share, and is followed by Google’s Gemini and Anthropic. Other tools like Meta AI and Grok command a tiny market share.
There are also concerns about whether these investments will ultimately pay off in the long term. Also, and most importantly, investors are concerned about the potential dilution of their shares.
Meta Platforms ended the last quarter with over $81 billion in cash and marketable securities. Despite this, the company is expected to go to the market to raise over $80 billion through a combination of debt and equity.
Meta’s revenue growth has slowed
The ongoing Meta Platforms stock retreat is also happening as its growth slows. The most recent results showed that its business continued doing well in the first quarter. Its revenue jumped by 33% in the first quarter to $56 billion, while its operating margin remained unchanged at 41%.
Analysts anticipate that its revenue will rise by 25% this year, followed by 19% in the coming year. As such, the management aims that its AI products and the recent monetization strategies on WhatsApp will boost its growth in the coming years.
Third-party data shows that the company has become highly undervalued. Its forward price-to-earnings ratio has dropped to 17, lower than the five-year average of 22.
READ MORE: Meta stock struggles in 2026: is a second-half rebound coming?
Meta Platforms stock price technical analysis
META stock chart | Source: TradingView
The weekly chart shows that the Meta stock has retreated in the past few months, moving from a record high of $796 to the current $562. It has dropped below the crucial support of $630, the 23.6% Fibonacci Retracement level.
It has also formed a head-and-shoulders pattern. Also, it has slumped below the 50-week Exponential Moving Average (EMA). The Relative Strength Index (RSI) and the MACD have also continued falling.
Therefore, the stock will likely continue falling, potentially to the key support of $450. It will then bounce back later this year as it has now become a value stock.
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