Regulatory Hurdles and Supply Constraints Weigh on Meta’s Outlook

Meta Platforms, Inc., the parent company of Facebook, is confronting a dual challenge of regulatory scrutiny and operational bottlenecks. Investor sentiment has been dampened by a new investigation launched by Chinese authorities into a major acquisition, coinciding with significant supply chain delays for a key hardware product.

Operational headwinds are impacting Meta's expansion plans in the consumer hardware space. The company has postponed the international launch of its Ray-Ban Display AR glasses in several markets, including the United Kingdom, France, Italy, and Canada. This indefinite delay stems from a supply-demand imbalance: while consumer demand in the United States has exceeded expectations, a shortage of critical components, such as memory chips, has constrained production. Current wait times for the product reportedly extend into 2026. Although the strong demand validates the product's market fit, analysts view the production constraints as a missed near-term revenue opportunity in a competitive global landscape.

Chinese Scrutiny Over AI Acquisition

Adding a layer of geopolitical uncertainty, Chinese regulators are examining Meta's planned $2 billion acquisition of the AI startup Manus. Although Manus is headquartered in Singapore, the Chinese origins of its founders have prompted the review by China's Ministry of Commerce. The investigation focuses on potential violations of technology export controls and overseas investment regulations.

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

This probe presents a tangible risk to Meta's artificial intelligence strategy. Market observers are concerned that the approval process could become protracted or be subject to stringent conditions, which would significantly delay the integration of Manus's technology into Meta's broader infrastructure.

Analyst Sentiment Reflects Mixed Outlook

The current situation has led to divergent views among Wall Street analysts. Cantor Fitzgerald bucked the cautious trend by raising its price target to $750. Conversely, Guggenheim reduced its target from $875 to $800, citing the emerging risks. Meta's shares have reacted weakly to these developments, currently trading around $646—a five-week low. The stock remains notably below its 52-week high of $708.

Investor attention is now firmly set on the quarterly earnings report scheduled for January 28, 2026. This report is expected to provide clarity on the financial impact of both the supply chain disruptions and any potential legal costs associated with the Chinese investigation. Until these fundamental questions are resolved, the equity is likely to experience continued volatility.