Meta’s Paradox: Record Profits, Eroding Trust

"What are you on about? Meta is wildly profitable and stronger than ever", people wrote to me after my earlier article on Meta, in which I quoted Julia Angwin, who two months ago in the New York Times predicted Meta's demise.

And it's true. Revenues and profits are growing double digits, breaking records and shattering analysts' forecasts. But that isn't the whole truth.

Angwin argues Meta is at the start of a long decline, the product of a failed investment strategy and unchecked spending. Between 2021 and 2026 the company burned $80bn on a metaverse vision that has largely been shelved, remember that? Now it's pouring bottomless sums into the AI race. Meta has raised its investment forecast to $125–145bn this year, after already sinking similar amounts into models that were adopted in parts of the industry but never became market leaders. To fund it all, Meta has doubled its debt to $59bn.

The cost of losing trust

In the first quarter of 2026 the company recorded the first fall in its history in daily active users, dipping from 3.58 billion to 3.56 billion. A small change, but in a new direction. Downwards. In response, Meta began cramming in more ads and pushing up prices, a move that admittedly lifted average revenue per user (ARPU) by 27% that quarter, but is likely to breed frustration and hasten the exit of advertisers and users from the platforms that generate roughly $200bn a year in advertising for it.

Meta faces a deep legal and public trust crisis, which is mostly where I focused. After losing a New Mexico lawsuit that found its failings had enabled the harm and exploitation of minors, and being ordered to pay $375m, it now faces consolidated suits from dozens of states and thousands of plaintiffs awaiting further hearings, alleging it deliberately designed addictive, dangerous products for young people. Yet rather than improving its products to meet the criticism, it does the opposite, letting scams, spam, lies and dangerous content flood in to boost immediate profits. How well do you reckon that strategy holds up over the long run? In any case, look at the share price over the past year and you'll find that, despite rising revenues and profits, the dominant trend is downwards.

Does it deserve it? No doubt. This week it emerged that Meta not only tracks its employees' mouse movements but also sacks those who don't move them enough, even, according to one lawsuit, when they were simply on holiday. So yes, Meta is stronger than ever. But this may well be the turning point.