Meta Platforms (NASDAQ:META) is in legal soup. Andre Elijah Immersive, or AEI, a company specializing in the design of interactive games and applications, has sued Meta for its monopolistic behavior. AEI accused the social media and technology giant of unlawfully breaking a deal with it to maintain its dominance in the fast-growing virtual reality market.
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Meta and AEI collaborated to create a VR (Virtual Reality) Fitness App, originally planned for release during the Meta Connect 2023 event in September. However, this anticipated launch was abruptly halted when Meta terminated their agreements, as per AEI’s statement. The company added that the launch at Meta Connect (the biggest virtual reality conference) had the potential to propel the AEI Fitness App to a leading position within the VR Fitness App market. Further, it would have enabled the app to secure a substantial market share.
According to AEI, Meta became aware that Apple (NASDAQ:AAPL) and Pico, who are its direct competitors in the VR Headset and VR App distribution markets, agreed to launch the AEI Fitness App on their platforms within the next 1-2 years. Such partnerships with Apple and Pico had the potential to greatly enhance AEI’s competitive stance and disrupt Meta’s dominant position in the VR market, which is projected to grow rapidly and reach $109 billion by 2030. This, AEI claims, prompted Meta to terminate their agreement and halt the app’s launch.
As the lawsuit’s outcome is awaited, let’s look at what the Street recommends for Meta stock.
What is the Prediction on Meta Stock?
Legal and regulatory risks are not new for Meta. Further, TipRanks’ Risk Analysis tool shows that legal and regulatory risks account for 21.3% of its total risks. At the same time, its legal and regulatory risk exposure is marginally higher than the industry average.
Nonetheless, analysts remain unfazed by these risks and maintain an upbeat outlook about Meta stock. It has received 40 Buy, and two Hold recommendations for a Strong Buy consensus rating. These analysts’ average 12-month price target of $376.03 implies 14.71% upside potential from current levels.
