Meta Stock Rises Even as Elon Musk Declares that 'WhatsApp Is Not Secure'

Meta Platforms (META) shares climbed slightly in pre-market trading on Tuesday, even as Elon Musk launched a viral attack on the company's privacy standards. The stock is currently benefiting from a pre-earnings run-up as investors anticipate a strong holiday revenue report on Wednesday. Wall Street remains focused on Meta's massive AI-driven ad growth, choosing to overlook the escalating war of words between Musk and Mark Zuckerberg.Claim 50% Off TipRanks PremiumUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential Musk Declares 'WhatsApp Is Not Secure' The controversy began when Musk shared a report detailing a new lawsuit filed in San Francisco. The legal filing alleges that Meta employees can bypass encryption using internal "task" requests to read private messages in real-time. Musk was direct in his response on X, stating: "WhatsApp is not secure. Even Signal is questionable. Use X Chat." This move is a direct hit to Meta's reputation, especially in markets like India and Brazil where WhatsApp is the primary tool for both personal and business life. Musk's skepticism toward Signal, an app he once famously recommended, suggests he is now positioning X as the final frontier for secure, un-monitored communication. Meta and WhatsApp Execs Push Back Leadership at Meta was quick to counter the narrative. Will Cathcart, the head of WhatsApp, directly replied to Musk's post to set the record straight. He argued that encryption keys are stored strictly on users' phones and that the company has no mathematical way to read messages. Cathcart labeled the lawsuit as a "no-merit, headline-seeking" attempt by a law firm with a history of defending controversial spyware. Meta spokesperson Andy Stone echoed this sentiment, calling the claims "absurd." Through a decade of using the Signal Protocol, Meta has built its brand on the promise of privacy. The company maintains that the "backdoor" access described in the lawsuit simply doesn't exist, framing the legal challenge as a "work of fiction" designed to manipulate the stock price. Why Meta Stock Is Rising Anyway Despite the drama, the market is voting with its wallet. Meta stock is rising because of a "buy-the-rumor" sentiment ahead of Wednesday's earnings call. Analysts expect revenue to hit $58.4 billion, a 21% jump driven by high holiday ad demand. Investors are betting that the money machine of Instagram Reels and AI-targeted ads is far more important to the company's future than a social media spat. Is Meta a Good Stock to Buy? Turning to Wall Street, META stock has a Strong Buy consensus rating based on 38 Buy, six Hold, and one Sell recommendations. The average Meta Platforms stock price target of $821.11 implies an upside potential of 22%.