Jim Cramer Warns Meta Isn't The Next Big Tobacco: Forget Lawsuits, Focus On AI—Investors Are 'Going To Regret' Selling

CNBC's Jim Cramer is urging investors not to panic-sell Meta Platforms Inc. (NASDAQ:META) following multimillion-dollar courtroom defeats, arguing that the tech giant is not the next Big Tobacco and that its heavy artificial intelligence (AI) investments will drive massive future growth. The ‘Big Tobacco’ Rebuttal Meta shares tumbled nearly 8% after juries in Los Angeles and New Mexico found the company liable for purposefully designing addictive apps that harmed young users. The California verdict bypassed the industry’s traditional Section 230 legal shield by treating social media platforms as defective products, drawing heavy comparisons to the historical downfall of Big Tobacco. Cramer, however, firmly rejects that narrative. "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," Cramer stated, according to CNBC. He argued that tech companies have been far more transparent about platform risks than the tobacco industry ever was. He views the stock’s recent 15% slump in March as a prime buying opportunity rather than a death knell. Investors are "going to regret" selling Meta stock, Cramer warned, pointing out that upcoming earnings and CEO Mark Zuckerberg's decisive corporate restructuring could easily spark a major rally. Focus On AI Fundamentals Instead of dwelling on the legal battles, Cramer advises focusing on Meta’s underlying fundamentals and its massive AI infrastructure build-out. The company expects capital expenditures between $115 billion and $135 billion this year. While that spending surge has temporarily pressured the stock, Cramer insists it is a vital move to ensure the megacap company is not left behind in the AI race. Meanwhile, Meta also announced on Thursday that it is increasing investment in its El Paso, Texas AI data center to $10 billion, a more than sixfold jump, as it aims to hit 1-gigawatt capacity ahead of the facility's projected opening in 2028, according to Reuters. The Broader Market Perspective Other market experts agree that while the short-term legal optics are rocky, the long-term tech thesis remains highly intact. Joe Tigay, portfolio manager at the Rational Equity Armor Fund, echoed a similar sentiment regarding Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), which was also penalized alongside Meta in the Los Angeles lawsuit. While Tigay acknowledged the immediate downward pressure on social media stocks, he told Schwab Network that he is "very bullish" long-term. Applauding Alphabet’s own multi-billion dollar tech investments, Tigay noted that these companies are properly funding their futures and innovating ahead of the curve, rather than simply resting on their legacy platforms. META Underperforms In 2026 Shares of META have declined by 17.05% year-to-date, outpacing the losses in the Nasdaq 100 index, which fell by 6.42% in the same period. The stock was 26.38% lower over the last six months and 10.38% over the year. It closed 7.96% lower at $547.54 apiece on Thursday. Benzinga’s Edge Stock Rankings indicate that META maintains a weak price trend over the short, medium, and long terms, with a solid growth score. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock