Meta Platforms has had a brutal year by its own recent standards. Shares are down sharply, and a high-profile courtroom battle is only adding to the pressure on a stock that used to be one of the market’s steadiest performers.
Still, Jim Cramer is telling investors not to panic, and he has one of Wall Street’s biggest banks backing him up. The case both are making rests on a familiar bet: that the business fundamentals will outlast the legal noise.
Jim Cramer Meta stock buy case and Bank of America $810 price target
Cramer and Bank of America are both advising investors to hold Meta stock despite ongoing litigation over alleged addictive design targeting children. Bank of America analyst Justin Post cut the firm’s price target to $810 from $825 but kept its buy rating, implying roughly 38% upside from Meta’s July 30 closing price of $585.61, according to TheStreet.
A federal lawsuit brought by a coalition of 29 state attorneys general is currently underway before Judge Yvonne Gonzalez Rogers in a federal courtroom in Oakland, California. T
he trial, which opened on August 18, is expected to last six to seven weeks and could expose Meta to penalties Meta’s own attorneys have estimated as high as $1.4 trillion, with remedies that may force an overhaul of Facebook and Instagram. Zuckerberg may be called as a witness, though the attorneys general said on the first day of trial they had not yet decided whether to do so, according to CNBC.
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This trial is not just about Meta. More than 1,300 school districts have filed related claims against social media companies. Whatever Judge Rogers decides in Oakland will be studied carefully by every lawyer involved in every one of those cases.
Cramer has not been dismissive of the litigation itself, even while defending the stock. He said on social media that the trial is unfolding in what he considers a difficult venue for corporate defendants, adding that the case could ultimately face a Supreme Court review.
Meta valuation 16x 2027 earnings and why Bank of America stays bullish
Bank of America’s bullish case rests heavily on valuation. Post’s note pointed out that at the after-hours price of $542 following the Q2 miss, Meta was trading at just 16 times estimated 2027 earnings, a meaningful discount to the S&P 500’s roughly 20 times 2027 earnings. Post also cited Meta’s growing AI capacity assets as reasons the litigation overhang looks overdone relative to the stock’s underlying business.
The bank also pushed back on worst-case damage scenarios. Analysts noted the trial’s jury verdict is only advisory, with the presiding judge holding final authority over the judgment and remedies, and pointed out the judge has already narrowed the plaintiffs’ original claims.
Wall Street’s broader analyst community has largely stayed supportive even as the stock has struggled. Meta’s second-quarter earnings per share came in at $6.18, missing the consensus of roughly $7.20 by approximately 15%, weighed down by a $2.4 billion litigation charge and $1.18 billion in severance costs. Free cash flow plunged 91% to $784 million, according to Quartz.
Yet Cramer himself has previously flagged the litigation overhang as a real concern for his own charitable trust’s Meta position, even while continuing to hold the stock.
Not everyone is buying the bull case. The tobacco comparison keeps coming up among legal observers, and it is not flattering. In the 1990s, tobacco companies paid billions and still had to redesign their entire relationship with the public. The money was painful. The product changes were worse.
Some analysts think the same dynamic applies here, where a judge ordering Meta to gut its recommendation algorithms would do more damage to the advertising engine than any single penalty ever could.
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Meta fighting on multiple fronts
The Oakland trial is not an isolated event. A New Mexico judge ordered Meta to pay a total of $942 million in the state’s child safety case in August, combining a $375 million jury verdict from March with a new $567 million abatement fund ruling, according to CNBC.
Meta itself has acknowledged the pattern is spreading. The company flagged in a recent filing that ongoing youth-related legal and regulatory matters, including several U.S. trials scheduled for 2026, may ultimately result in material losses. That warning comes alongside the $2.4 billion in Q2 legal charges Meta already reflected in its second-quarter results.
Meta is not just fighting in courtrooms. The company spent roughly $13 million on federal lobbying in the first two quarters of 2026, pushing for liability protections tied to the Kids Online Safety Act. That is not the behavior of a company that thinks it is going to win every case.
The financial risk is layered on top of an already expensive year. Meta raised the bottom end of its 2026 capital expenditure forecast to $130 billion from $125 billion, while keeping the top end at $145 billion.
The spending is primarily focused on expanding AI infrastructure and supporting Meta’s broader computing needs. That combination of legal exposure and AI spending helps explain why the stock has drawn such a wide range of analyst opinions this year.
What Meta stock investors should watch on litigation advertising revenue and capex
The jury in this trial is advisory. That is the first thing investors need to understand before reacting to whatever verdict comes out. Judge Rogers makes the final call. Jury says $1 trillion, she can cut it to nothing. She can also reduce any award on appeal.
The headlines will be loud. The actual cash impact, if any, is years away and almost certainly smaller than what gets reported on verdict day.
The money is almost the secondary concern here. What Meta’s investors should actually be watching is whether Judge Rogers orders product changes. Infinite scroll gone. Recommendation algorithms redesigned. Those features are the engine behind Meta’s ad revenue.
A fine, even a large one, gets paid and the business moves on. A court order to rebuild how the product works is a different problem entirely.
Investors should also keep watching Meta’s underlying business performance alongside the legal news. Advertising revenue grew to $59.4 billion in the most recent quarter from $46.56 billion a year earlier, according to Quartz. That is the number Cramer’s underlying bet is built around. Whether it holds up will depend less on his confidence than on how the Oakland judge ultimately rules once testimony wraps.
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