Meta and YouTube face allegations of creating knowingly addictive features

Core Viewpoint - Meta is facing a significant trial regarding allegations of designing addictive features into its apps, coinciding with its upcoming earnings report, which is expected to be a critical moment for the company [2][3]. Group 1: Earnings and Financial Performance - Meta's stock has increased by 11% in the past week due to positive analyst notes, but it remains down 11% since its last earnings report [2]. - The company's quarterly revenue growth rate is anticipated to slow, and investors will closely monitor capital expenditures (capex), with 2026 capex guidance expected to exceed $110 billion according to FactSet estimates [3]. - Analysts are largely optimistic about Meta's earnings, with 93% holding a buy rating and no sell ratings on the stock [4]. Group 2: Strategic Focus and Challenges - Near-term, Meta is under pressure to demonstrate that its AI investments are enhancing its core advertising business and driving revenue growth from platforms like WhatsApp and Threads [3][4]. - Long-term, CEO Mark Zuckerberg must justify the company's substantial spending on AI initiatives [4].