The slump in Meta Platforms — exacerbated by two social media court defeats this week — could be setting up as a buying opportunity. Meta shares sank more than 8% on Thursday after a Los Angeles jury late Wednesday found the company (and Google’s YouTube) negligent in the case of a woman who alleged she became addicted to apps as a kid. Damages totaling $6 million were awarded, with Meta on the hook to pay 70% of them. On Tuesday, a jury in Santa Fe, New Mexico , held Meta liable for $375 million in civil damages for violating state consumer protection laws. Meta said it will appeal the Santa Fe ruling and explore its options in the California case. (Google parent Alphabet said it will appeal the California verdict.) “If you decide that you’re going to sell Meta because it looks like this is going to be tobacco, it’s not going to be tobacco,” Jim Cramer said Thursday on CNBC, referencing the years of Big Tobacco lawsuits and subsequent government regulation of the industry as unlikely outcomes for Big Tech. “Tobacco hid it for years,” Jim said, arguing tech companies have been “quite open” about the risks of social platforms. Meta has been our worst-performing megacap tech stock in March, losing more than 15%. Investors are “going to regret” selling Meta stock, Jim added, pointing out that earnings next month could be great and/or CEO Mark Zuckerberg could announce more layoffs. Either one of both could spark a rally. “We’re very close to needing to buy some,” Jim told Club members, considering the recent decline as a way to pick up more shares on the cheap. The stock currently trades at a forward price to earnings estimates of 18 times compared to its five-year average of 23 times. META YTD mountain META stock performance YTD. What’s at stake This week’s decisions against Meta challenge long-standing legal protections under Section 230 of the Communications Decency Act, which has historically shielded social media companies from liability tied to user-generated content. The California case is the first time a jury treated social media platforms as defective products designed to exploit young users. More than 3,000 similar suits are pending in California courts, according to a Wall Street Journal report. Jim said he does not like to see plaintiffs piling on the tech companies, recalling the stampede of talc litigation against former Club stock Johnson & Johnson . “It’s what [lawyers] do. They rove and find someone that they think they can beat, then they get a lot of different people signing up, then they go for mass tort litigation and make a lot of money,” explained Jim, who graduated from Harvard Law School in 1984 but went right to Wall Street instead of being a lawyer. “That’s been the pattern with these, whether it be asbestos or whether it be what happened with J & J with talc,” he said, suggesting Meta and other tech companies are being targeted because “they’re deep-pocketed.” To be sure, Jim warned that if the cases continue, investors should brace for volatility in Meta stock. From a financial standpoint, Bank of America estimates teen users account for roughly 1% of Meta’s revenue, suggesting limited exposure even if usage among younger audiences declines. However, an avalanche of verdicts against the company could lead to forced remedies that could disadvantage the company well beyond sales fundamentals. Bottom line Jim overall favors the optimistic view that Meta is positioned for growth as CEO Mark Zuckerberg continues to make aggressive long-term bets and decisive changes at the company in the age of AI. That includes new compensation structures tied to stock performance, potentially allowing top executives to benefit if shares rally explosively in the coming years. Meta also announced hundreds of layoffs across several divisions this week, including its Reality Labs unit. While “the optics aren’t good,” Jim framed the move as consistent with Meta’s history of tightening costs during uncertain economic times. “Yes, he did lay off some people. Are we supposed to think that that’s bad? Every time he lays off people, he’s made even more money.” At the same time, Meta is ramping up spending elsewhere. The company expects capital expenditures between $115 billion and $135 billion this year, largely tied to building out AI infrastructure. It’s that surge in spending – more than the legal battles – that has been the primary pressure on the stock so far this year. Jim has said in the past that Meta and the rest of the megacaps must keep spending in order not to be left behind in AI. The Club maintains a buy-equivalent 1 rating on Meta and $825-per-share price target. (Jim Cramer’s Charitable Trust is long META, GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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