Meta Platforms, Inc. (NASDAQ: META) saw its stock close modestly higher during the holiday-shortened trading session on Christmas Eve, only to experience a slight downturn in after-hours trading as investors reacted to new regulatory scrutiny from Europe while continuing to discuss the company’s substantial investments in artificial intelligence (AI). The stock ended the regular session at approximately $668.05, marking an increase of about 0.47%, but was indicated around $664.40 in after-hours trading, reflecting a decrease of about 0.47% from its regular close. This movement occurred against a backdrop of lower trading volumes typical for holiday periods.
The decision by Italian regulators to order Meta to suspend certain contractual terms associated with WhatsApp that may hinder the operation of competing AI chatbots was a significant catalyst for late-day market activity. The Italian Competition Authority (AGCM) has been investigating Meta for potential abuse of dominance, claiming that the terms could disadvantage rival AI technologies. Meta has labeled the ruling as “fundamentally flawed” and intends to appeal, arguing that the rapid growth of AI chatbots has stressed systems that were not designed to accommodate such demands.
This development is critical for investors as WhatsApp is viewed as a key future revenue generator through business messaging and payments, alongside emerging AI-assisted commerce models. Any regulatory changes that affect how WhatsApp interacts with AI could influence expectations regarding the platform’s economic structure, speed of AI feature rollouts, and the overall monetization potential of AI-driven interactions on the platform.
Italy’s investigation began in July and was expanded in November, coinciding with a parallel probe by EU antitrust regulators into similar allegations against Meta. The urgency of the situation is heightened by a scheduled policy change that could further restrict the operation of rival AI assistants on WhatsApp’s business platform, set to take effect on January 15. This date signals a potential tipping point for Meta, with investors likely to adjust their expectations based on the company’s responses to the regulatory pressure.
As 2025 approaches, the narrative surrounding Meta stock is also heavily focused on the company’s aggressive AI spending strategy. Market analysts are divided on whether the extensive investments, including a $27 billion funding plan for its “Hyperion” supercomputer, will lead to sustainable growth or will continue to weigh on profit margins. Analysts have raised concerns that increasing operational costs, such as data center depreciation, may outpace revenue growth, challenging management to demonstrate clear returns on such investments.
Despite some analysts adjusting their price targets downward, sentiment remains cautiously optimistic. For instance, Baird analyst Colin Sebastian maintained an “Outperform” rating, albeit with a revised price target of $815, urging investors to consider the stock as a potential buying opportunity amid prevailing market uncertainties. Broader consensus indicates a “Strong Buy” rating among analysts, with an average 12-month price target hovering around $819.
On the market front, the general atmosphere on December 24 was buoyed by a broader rally, with major U.S. indices, including the Dow and S&P 500, reaching record highs, primarily driven by rebounds in AI-related stocks amidst thinner holiday trading. This context is vital for understanding the trading environment surrounding Meta, where reduced liquidity may amplify reactions to news, including regulatory developments and shifts in investor sentiment.
As traders prepare for the next market session on December 26, following a closure for Christmas Day, several key factors will be under scrutiny. Investors will watch for any further communication from the AGCM or the European regulators regarding the WhatsApp terms, as well as Meta’s position on the matter. How Meta navigates the balance between regulatory compliance and maintaining a competitive edge in the AI space will be critical to its stock performance in the near term.
Additionally, indications of spending discipline ahead of the next earnings report will be closely monitored, particularly in light of ongoing debates around the effectiveness of AI investments. Technical indicators, such as the 50-day and 200-day moving averages, will also come into play as traders assess potential market movements. Given the thin trading environment typical during the holiday season, even minor headlines could lead to significant price fluctuations as the year draws to a close.
In summary, Meta stock closed near $668 on Christmas Eve, dipping slightly to around $664 in after-hours trading. The implications of Italy’s regulatory order concerning WhatsApp and the accompanying AI chatbots present a noteworthy challenge for the firm, as does the broader discourse on AI spending against the backdrop of market expectations for 2026. How Meta addresses these multifaceted pressures will be crucial as it seeks to solidify its position within the competitive landscape.
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