Meta Platforms Inc.

French prosecutors have opened a harassment investigation involving unspecified smart glasses, turning up regulatory heat on Meta Platforms as its EssilorLuxottica partnership commands roughly 76% of the global smart-glasses category. Privacy regulator CNIL has received fewer than ten workplace complaints without naming individual brands, and the French investigation has not accused Meta's products of wrongdoing. Meta's exposure still matters because the companies sold about seven million units last year, putting Meta near the center of the debate. The bigger issue is where customers will actually be allowed to wear these devices, as workplace rules, recording indicators and privacy safeguards could increasingly determine the usable market for smart glasses as adoption spreads. Meta shares dropped to $677.30, a price that sits 20.72% below the $854.33 GF Value.

Goldman Sachs Research says the forward price-to-earnings multiples of the largest S&P 500 companies have fallen sharply and are now converging toward the valuation of the other 495 stocks in the index, eroding a valuation premium mega-cap technology names have held for years. The firm points to two pressures behind the de-rating: a higher cost of capital and dramatically greater capital intensity. Microsoft, Amazon, Meta Platforms and Alphabet are committing enormous sums to artificial-intelligence infrastructure, including data centers, chips and power capacity, investments that may support future growth but consume cash today, while higher borrowing costs reduce the present value investors assign to future earnings and cash flows. Goldman's takeaway is that mega-cap tech is no longer priced as dramatically different from the rest of the market, leaving those companies to prove their growth deserves a premium, and investors should focus less on headline AI spending and more on the returns generated from it.

Chinese AI startup Manus is reportedly seeking roughly $500 million in fresh financing that could double its valuation to $4 billion, only months after regulators forced the unwinding of its proposed acquisition by Meta Platforms. The round would make Manus China's most valuable AI-agent company if completed, and would mark its first major capital raise since its relationship with Meta was dismantled. The two companies had agreed to a roughly $2 billion acquisition before Chinese authorities intervened over concerns that Manus had not notified regulators before signing and that the deal could set a precedent for valuable Chinese AI technology moving into U.S. hands. Meta had already integrated Manus into internal systems and its advertising platform before the transaction was unwound; the companies completed their operational separation in May and stopped sharing data, with Manus' founders and existing investors including Tencent, HSG and ZhenFund buying Meta's shares back at the original $2 billion valuation. Terms of the new financing are still under discussion and could change, and the report did not indicate whether existing backer Tencent would participate; a successful raise could help Manus remain independent and potentially move closer to a Hong Kong IPO.

A German court has held Meta Platforms liable for fraudulent third-party advertisements on Facebook and Instagram, a September 16 decision that could raise the bar for how quickly digital platforms must respond to reported scams. The case was brought by a German financial portal and its founder after their trademarked logo and image were used without permission to promote allegedly fraudulent investments. According to the court, the portal reported nearly 260 violations to Meta in August 2024 alone, with some flagged content taking as long as 62 days to be removed. The ruling ordered Meta to remove the advertisements and pay damages, and it rejected Meta's attempt to rely on the Digital Services Act's lack-of-knowledge defense, with the court arguing that Meta exercises meaningful control over what users see because Facebook and Instagram use algorithms to distribute content and advertisements rather than simply displaying posts chronologically, citing a June European Court of Justice ruling as precedent. Meta said it disagrees with the decision and is considering its next steps, pointing to systems it already uses to proactively detect harmful content and remove material reported by users; the decision is not final and can still be appealed, and Meta must also disclose information about the fraudulent advertisements and the revenue generated from them.

The European Union has proposed the KIDS Act, which would place far more responsibility for children's online safety directly on platforms such as Meta Platforms. The proposal would block social-media access for children under 13 and require parental controls for users aged 13 to 15, while also targeting profiling algorithms, infinite scrolling, reward-based engagement and unsolicited contact, with AI companions switched off by default for younger users. Platforms could face penalties of as much as 6% of worldwide annual sales for non-compliance, though the proposal still needs negotiations with EU member states and the European Parliament before becoming law. Meta shares traded at $672.84 Thursday, and the company spent $31.08 billion on capital expenditures last quarter, equal to roughly 51.1% of revenue. Meta does not separately disclose revenue generated from users under 18, leaving open how much it may need to redesign recommendation, advertising and AI products across Europe before investors can quantify the revenue actually at risk.

Meta Platforms agreed on August 26, 2026 to pay up to $17 billion over 10 years and to overhaul how teenagers use Instagram and Facebook, settling a lawsuit brought by more than 40 states, the District of Columbia, and several territories over claims its platforms fueled social media addiction among young people. The company will roll out a two-hour default daily time limit across both apps, block access between midnight and 6 a.m., mute notifications during school hours, hide like counts, and offer a non-algorithmic feed option. Meta said most default protections will launch within six months, while stricter age-verification tools will take up to a year to build. Teens make up less than 1% of Meta's revenue, so the new restrictions should have a limited direct effect on current advertising revenue, though the changes could weaken engagement metrics and push younger users toward TikTok and YouTube. Florida is pursuing separate litigation, and Meta still faces other active lawsuits over social-media harms.

Federal Reserve Chair Kevin Warsh said the borrowing spree by AI hyperscalers is one reason long-term borrowing costs are rising, pointing to the competition for capital as the 10-year Treasury yield hit 5%. Warsh, speaking after the Fed raised its benchmark rate by a quarter point to 3.75-4%, said the so-called hyperscalers are out in the market raising funding and that the competition for capital is real. The five major hyperscalers issued $121 billion in U.S. corporate bonds in 2025, compared with an average of $28 billion a year between 2020 and 2024, according to BofA Securities, while Morgan Stanley estimates AI-related global debt reached nearly $236 billion by the end of May and forecasts it will approach $570 billion for the full year of 2026. Hyperscaler capital spending now runs close to 100% of operating cash flow, with some dipping negative, forcing the companies to turn to bond markets. Warsh also cited economic growth and geopolitics, namely the Iran war, as reasons for higher yields, but did not list the federal deficit, the explanation most bond investors give. He added that the Fed has set up an internal task force on AI, due to report by the end of the year.

Meta Platforms appointed Dina Powell McCormick to lead its AI infrastructure buildout and outside capital strategy, giving her a remit that includes coordinating Meta's internal AI development plans with potential external financing partners and policy stakeholders. The appointment concentrates responsibility for how multi gigawatt projects, custom chips and power deals are funded and explained to policymakers, rather than leaving it fragmented across teams. At the same time, multiple U.S. school districts expanded litigation alleging that Meta's platform design contributes to youth mental health risks, with a February 2027 federal bellwether trial for the school district claims serving as a practical waypoint for investors. Meta currently pays a quarterly dividend of US$0.525 per share, and investors are watching whether that payout holds as AI capital spending and legal settlements absorb more cash. Meta Platforms runs social and communication apps and develops VR headsets and AI glasses across the US and international markets.

Apollo Global Management said Wednesday that corporate debt from major cloud computing companies is becoming riskier as these firms increase spending on artificial intelligence infrastructure. Apollo chief economist Torsten Slok wrote in a note that the market is repricing hyperscaler credit fundamentals due to a debt-financed AI capital expenditure cycle with rising leverage, negative free cash flow and uncertain payback on depreciating assets. According to Apollo's research, the gap between hyperscaler credit default swaps and bank credit default swaps has widened to around 60 basis points from roughly zero since October 2025, suggesting hyperscaler credit risk is increasing independently rather than as a result of dealer hedging of new bond issuances. The warning comes after leaders of frontier large language models said over the weekend they want to slow the rate of advancements of their products due to safety concerns, which could have financial consequences for the cloud computing providers that run the LLMs. According to FactSet, Alphabet has a forward debt-to-equity ratio of 13% and forward free cash flow of negative $25.7 billion, Amazon has debt-to-equity of 23% and free cash flow of negative $30 billion, Meta Platforms has debt-to-equity of 34% and free cash flow of negative $25.7 billion, and Microsoft has debt-to-equity of 7.34% and positive free cash flow of $33.4 billion.

Global hedge funds trimmed long positions across all of the Magnificent Seven in August as the financing of the AI infrastructure buildout increasingly shifted from equity toward debt-financed structures, according to the Data Insights Crowding Report August 2026 from Data Insights, a division of Hazeltree. Microsoft and Nvidia recorded only modest declines in long holders, while Amazon, Tesla, Meta, Alphabet and Apple saw more meaningful reductions, and short fund participation rose in Amazon, Alphabet and Apple, with a more moderate increase in Meta; Nvidia was the only Magnificent Seven name to see short participation fall. Semiconductor sentiment turned modestly less bullish, with the share of PHLX Semiconductor Sector Index constituents showing net long positioning slipping to 66.7% from 70.0% a month earlier, and MACOM Technology Solutions flipped from short-biased to long-biased, its long-to-short fund count ratio crossing above parity to 1.23x from 0.98x and net long exposure rising to 63.9% from 48.3%. Tim Smith, managing director at Data Insights, Hazeltree, said investor concern stemmed from whether future cash flows will cover the financing costs of the debt funding them, citing Nvidia's move to turn AI into an investable infrastructure asset class supported by financing platforms designed to mobilize more than $500 billion in third-party capital over time. Smith also flagged Alphabet's fall from grace, its long-to-short fund count slipping for the first time this year to 0.92 in August from 1.70 in July, with the shares falling from a high of $377.65 on August 4 to a low of $340.67 on August 20, a peak-to-trough decline of roughly 10%, before closing at $348.06, down 2% from the July 31 close. The report is based on anonymized data covering approximately 16,000 securities and more than 700 global funds across the Americas, EMEA and APAC.

European Commission President Ursula von der Leyen said the EU will push for social media restrictions for children under 13 years, with a draft proposal set to be introduced on Thursday. The draft will impose strict age restrictions and verification requirements on social media, video-sharing platforms, app stores, online games, AI companions, and conversational AI chatbots, according to Bloomberg. "No social media under the age of 13. No personal account under the age of 15," von der Leyen said in her annual address on Wednesday, adding that the proposed law would allow 13- and 14-year-olds to have accounts with limited features and parental supervision. Companies that fail to meet the requirements could face fines of up to 6% of their annual sales. The bloc's upcoming rules follow Australia's ban last year on social media for children aged under 16, while individual EU member states have also been looking at setting their own restrictions.

Meta Platforms shares slipped about 0.2% to $664.64 Tuesday as investors weighed a proposed European crackdown on minors' access to digital platforms. Reuters reported that the proposed EU Kids Act would bar users under 15 from social media and AI chatbots while introducing tougher age verification, parental-control requirements and supervisory fees. The company's advertising engine remains powerful, with $60.8 billion in second-quarter revenue, up 28% year over year, and an average of 3.60 billion daily active people across its family of apps, while ad impressions climbed 14% and the average price per ad rose 12%. Meta does not disclose how much European advertising activity or engagement comes from users young enough to fall under the proposed restriction, leaving the direct financial exposure unclear. The stock trades 22.07% below its GF Value estimate of $852.92, suggesting investors are not treating the proposal as an immediate earnings shock.