Why is Meta stock down today?

Meta’s stock fell 1.49% to $627.06 following broader market turbulence sparked by U.S. President Donald Trump’s unexpected proposal of a 50% tariff on the European Union. 

While markets remain skeptical about the tariff actually being implemented on June 1, the uncertainty was enough to send the S&P 500 into its fourth consecutive daily loss. The correction suggests traders are bracing for potential policy reversals or new developments in the coming weeks, adding to volatility.

AI Delays and rising costs add to investor concern

According to analyst Dmytro Kharkov, several internal factors have amplified pressure on Meta’s stock. Chief among them is the delay of its next-generation AI model “Behemoth,” which was expected in April but is now postponed until fall or later. 

Engineering hurdles and performance concerns have slowed progress, sparking internal debates about the model’s readiness. In parallel, Meta has raised its capital expenditure forecast for 2025 to between $64 billion and $72 billion, much of which is dedicated to expanding AI infrastructure.

Analyst Kharkov noted: 

"The correction may last for the next few trading days. However, the overall positive market sentiment should allow the bullish trend to recover by the end of this week."

Competition and sentiment shift challenge Meta’s momentum

The delay puts Meta behind fast-moving competitors like OpenAI and DeepSeek, denting its competitive edge in the AI space. Despite strong Q1 earnings and a temporary easing of U.S.-China trade tensions, investor sentiment has turned cautious. Meta’s 1.49% price drop reflects growing unease about its AI strategy and spending trajectory.

Recently we wrote that ​Meta is reportedly re-evaluating its stance on stablecoins after the collapse of its initial crypto venture, Diem, in 2022.