Meta Faces Dual Challenges: Regulatory Scrutiny and Supply Constraints

Meta Platforms finds itself navigating a complex landscape marked by ambitious growth initiatives and significant operational headwinds. The company's strategic moves are currently under a microscope, with a major acquisition facing regulatory hurdles and a popular hardware product struggling to meet overwhelming demand. As its stock price consolidates, investors are weighing whether these immediate obstacles could derail the tech giant's long-term artificial intelligence ambitions.

In a direct response to escalating regulatory pressures, Meta has undertaken a significant reorganization of its top legal team. The company has appointed C.J. Mahoney, a former Microsoft executive and government official, to the role of Chief Legal Officer. This leadership change signals a potentially more aggressive legal stance as Meta contends with ongoing antitrust investigations and the review of a critical acquisition.

Acquisition in the Crosshairs

At the center of current uncertainties is Meta's planned $2 billion purchase of the AI platform Manus. Chinese authorities have reportedly initiated a probe into the deal, examining potential breaches of technology export controls. The investigation is focused on the transfer of personnel and proprietary technology from China to Singapore just prior to the sale announcement.

This regulatory challenge is particularly significant for Meta's roadmap. The Manus platform is considered a cornerstone of the company's future AI strategy, especially for automating complex enterprise workflows. The startup achieved an annualized revenue run-rate exceeding $125 million within just eight months, making its integration fundamental to Meta's growth projections. The Chinese intervention now casts doubt on the deal's timely completion.

Should investors sell immediately? Or is it worth buying Meta?

Supply Chain Struggles Signal Product Success

Simultaneously, Meta is confronting a supply-side bottleneck that underscores strong market reception for its hardware. The company has officially halted the international rollout of its Ray-Ban Smart Glasses. This decision was driven not by weak interest, but by a massive demand surge in the U.S. market that has outstripped current production capacity.

This supply shortage forces Meta to prioritize its domestic market, inevitably capping short-term global growth for this segment. Market analysts interpret the situation as a validation of the product's success, yet it also highlights the operational limitations within Meta's hardware division.

Valuation and Market Perspective

Despite these concurrent challenges, the fundamental investment thesis for Meta remains largely intact among experts. The stock carries an estimated forward P/E ratio of 21.5. The average analyst price target sits at $822. Shares closed the most recent session at $660.12, trading approximately 7% below their 52-week high.

The confluence of regulatory pressure and supply chain constraints is currently keeping the stock in a holding pattern. The future trajectory is heavily dependent on the outcome of the Manus acquisition review, as the deal is viewed as a key catalyst for Meta's next phase of AI monetization. In the absence of clarity on this front, the technical support zone around the $650 level is expected to remain crucial.