Query: How would you’re feeling if you happen to owned Meta Platforms stock (NASDAQ:META) and it crashed 60%, and even 80%, within the subsequent few months? Sounds excessive? It’s occurred earlier than – and it might occur once more. Meta has displayed higher stability to this point this 12 months, sustaining share costs just like January ranges, whereas the NASDAQ index has dropped roughly 10%. Not too long ago, the inventory has confronted strain after President Trump’s feedback left open the opportunity of a recession, producing investor uncertainty. Moreover, investor worries have elevated with the emergence of Manus, a brand new AI assistant from China, intensifying competitors within the sector.
The escalating financial worries in america, triggered by President Trump’s tariff implementation, are creating an unfavorable setting for markets general. We predict META inventory might fall additional to ranges as little as $200 per share. Right here’s why buyers should be involved.
Right here’s the factor: In a downturn, META inventory might lose significantly. There may be proof from as just lately as 2022 that META inventory misplaced over 70% of its worth within the matter of only a few quarters. So, might META’s roughly $600 inventory slide to beneath $200 ranges if a repeat of 2022 had been to occur? Now, after all, particular person shares are extra unstable than a portfolio – and on this setting, if you happen to search an upside with much less volatility than a single inventory, take into account the High-Quality portfolio, which has outperformed the S&P 500 and achieved returns higher than 91% since inception.
Why Is It Related Now?
Whereas META’s AI investments are displaying returns via larger person engagement, buyers had been underwhelmed by the corporate’s quarterly forecast. Meta continues making huge infrastructure investments to help its AI initiatives, with 2025 capital expenditures projected at $60-65 billion. Regardless of DeepSeek’s AI mannequin doubtlessly decreasing computing necessities, Meta’s management believes important sources are nonetheless essential for operating AI fashions, justifying continued heavy infrastructure funding. Nevertheless, DeepSeek’s developments and the brand new Manus launch counsel highly effective AI fashions may be developed at decrease prices, intensifying competitors and pressuring Meta to evolve its AI applied sciences like Llama.
From a macroeconomic perspective, President Trump’s commerce insurance policies might negatively affect META. The administration has doubled Chinese language import tariffs from 10% to twenty% on high of current levies, and Trump just lately proposed a “25% or larger” tariff on all imported semiconductor chips. These insurance policies might additional improve Meta’s already substantial AI infrastructure prices. Moreover, decreased client spending ensuing from tariff-driven value will increase could harm advertising-dependent companies, doubtlessly undermining Meta’s income streams.
How resilient is META inventory throughout a downturn?
META inventory has fared worse than the benchmark S&P 500 index throughout among the latest downturns. Whereas buyers have their fingers crossed for a tender touchdown by the U.S. financial system, how dangerous can issues get if there may be one other recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key shares fared throughout and after the final six market crashes.
Inflation Shock (2022)
• META inventory fell 73.7% from a excessive of $338.54 on 3 January 2022 to $88.91 on 3 November 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The inventory absolutely recovered to its pre-Disaster peak by 20 November 2023
• Since then, the inventory has elevated to a excessive of $736.67 on 17 February 2025 and at present trades at round $6o0
COVID-19 Pandemic (2020)
• META inventory fell 32.9% from a excessive of $217.49 on 19 February 2020 to $146.01 on 16 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The inventory absolutely recovered to its pre-Disaster peak by 20 Might 2020
Premium Valuation
In abstract, it additionally doesn’t assist that META inventory remains to be costly; it trades at virtually 25x trailing earnings. Certain, Meta Platforms’ Revenues have grown significantly over latest years, rising at a mean price of 12.2% during the last 3 years (vs. 9.8% for S&P 500). Nevertheless, this progress might fade shortly if the financial system takes a flip for the more serious.
Given this progress deceleration and the broader financial uncertainties, ask your self the query: do you need to maintain on to your META inventory now, will you panic and promote if it begins dropping to $400, $300, and even decrease ranges? Holding on to a falling inventory isn’t simple. Trefis works with Empirical Asset Administration — a Boston space wealth supervisor — whose asset allocation methods yielded constructive returns through the 2008-09 interval when the S&P misplaced greater than 40%. Empirical has included the Trefis HQ Portfolio on this asset allocation framework to offer purchasers higher returns with much less danger versus the benchmark index; much less of a roller-coaster journey, as evident in HQ Portfolio efficiency metrics.
| Returns | Mar 2025 MTD [1] |
2025 YTD [1] |
2017-25 Whole [2] |
| META Return | -6% | 7% | 446% |
| S&P 500 Return | -6% | -5% | 151% |
| Trefis Bolstered Worth Portfolio | -4% | -5% | 643% |
[1] Returns as of three/11/2025
[2] Cumulative complete returns because the finish of 2016
Make investments with Trefis Market-Beating Portfolios
See all Trefis Price Estimates
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
