Meta, Google’s $6 Million Loss In Social Media Trial Has Far-Reaching Implications, Says Gary Black As Mag 7 Stocks Underperform SPX

by | Mar 29, 2026 | General

Meta Platforms Inc. (NASDAQ:META) and Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) are under scrutiny following a California jury’s decision holding them accountable for a young woman’s mental health issues. This verdict has significant implications for the companies and the broader industry, according to The Future Fund LLC’s Gary Black.

META, GOOGL Fall Behind Due To Recent Underperformance

According to Gary Black, all Mag 7 stocks, including Meta and Alphabet, have lagged behind the S&P 500 this year.

Black linked the recent underperformance of Meta and Alphabet to the jury’s decision, which awarded the plaintiff $6 million in damages. The jury found that the platforms’ design and operation were addictive, and the companies either knew or should have known about the potential risks to children.

Parallels To Tobacco Verdicts Of 1990s

Black draws parallels to the tobacco verdicts of the 1990s, suggesting that the $6 million verdict might be overturned on appeal due to potential judicial biases. He notes that while the plaintiff had a traumatic childhood, there was debate over whether social media was the main cause of her trauma.

Looking ahead, Black speculates that META and GOOGL might implement age restrictions requiring government ID verification. Despite these challenges, Black believes both stocks are undervalued given their growth potential.

Mag 7 Stocks Face Headwinds

The legal challenges faced by Meta and Alphabet come at a time when the Magnificent Seven stocks are experiencing a divergence in performance. While some stocks like Nvidia continue to perform well, others, including Meta and Alphabet, are lagging. This case adds to the pressure on these companies as they navigate legal and regulatory challenges.

In a recent trial, the jury found that Meta and YouTube were negligent in purposefully designing addictive apps, particularly harmful to younger users. This ruling underscores the growing scrutiny of social media platforms and their impact on mental health.

As the industry faces increased regulatory scrutiny, the outcome of these legal battles could have far-reaching implications for how social media companies operate and protect their users, especially minors.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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