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Jim Cramer says don't sell Meta on litigation risk — the stock is worth the wait Published Mon, Aug 24 2026 4:11 PM EDT Paulina Likos @paulina_likos Meta Platforms ' mounting legal battles over allegations that it fostered addictive behavior in kids have become a headline risk for the already troubled Club stock. But like Jim Cramer, Bank of America warns investors against letting the courtroom drama overshadow the long-term opportunity. "While the stock is down on [California] trial headlines, we believe the current bellwether trial outcome will represent only one data point in a multi-jurisdictional litigation process that will take many years to resolve," BofA wrote in a note to clients Monday. Based on the drawn-out timeline and Meta's "compelling valuation" of around 16 times estimated 2027 earnings due to "growing AI capacity assets," the analysts kept their buy rating on the stock. They also maintained their $810 price target, implying nearly 45% upside from current levels around $560. Meta is facing a federal lawsuit brought by 29 state attorneys general. The trial, which got underway in an Oakland court last week, could result in billions of dollars in damages and forced remedies that could lead to an overhaul of Facebook and Instagram. Testimony from CEO Mark Zuckerberg and other company employees is expected. The outcome of this trial is consequential because it could set the tone for other pending cases across the country. The litigation has added another layer of uncertainty for Meta investors during an already difficult year, marked by concerns about the levels of artificial intelligence spending and the path toward seeing a return on those investments. Shares are down 26% in 2026, making Meta one of the worst-performing mega-cap tech stocks. META YTD mountain Meta Platforms YTD Still, Bank of America outlined several reasons investors should be careful about extrapolating a worst-case scenario from the California trial. Importantly, the jury's decision is advisory, meaning the ultimate decision rests with the judge, who can accept or reject the conclusions. Analysts noted that the judge has already dismissed several of the plaintiffs' claims. Bank of America believes "causation remains a hurdle" because "plaintiffs must link specific platform features to alleged youth harm," suggesting that link may not be linear. The firm also noted that as the trial drags on, "courts can reduce excessive damages through remittitur and awards may be overturned on appeal." The case could potentially reach the Supreme Court. Others on Wall Street, however, see higher levels of risk, equating Meta's case to Big Tobacco in the 1990s when tobacco companies had to pay billions for misleading the public about the safety and potential harms of their products. In the years that followed, tobacco companies lost their power as the lawsuits exposed their threat to public health. Mizuho sees "many parallels to the Big Tobacco case," and warns of possible fines in the tens of billions of dollars. In a note last week, the analysts said, "The sentiment impact from any significant platform changes would be immediately negative," raising questions about Meta's ability to grow its users over the…