Meta Platforms’ (META) stock gained 3% on Dec. 4 amid reports that the company plans to make significant cuts to its spending on the “metaverse,” a nascent virtual reality realm.
Multiple media reports say that the Facebook parent company is planning budget cuts as high as 30% for the metaverse business unit.
Meta Platforms’ stock has largely been trading sideways since the company announced along with its third-quarter financial results that it planned to increase its capital expenditures in 2026.
Concerns are growing among investors and analysts about the amount of money mega-cap technology companies are spending on artificial intelligence (A.I.).
Meta Platforms has announced that it is spending $70 billion U.S. to $72 billion U.S. on A.I. this year alone.
News that the company led by CEO Mark Zuckerberg might now pullback on some spending is being cheered by investors.
Cuts to the metaverse are significant for the technology giant, which changed its name to Meta Platforms in 2021 to signal its pivot away from social media and towards virtual reality.
The proposed cuts would likely include layoffs in early to mid-2026 as part of the company’s budget planning process.
Meta’s Reality Labs unit, which develops the Quest family of virtual reality headsets and Ray-Ban A.I. smart glasses, reported a $4.4 billion U.S. loss in the most recent quarter.
Since 2020, Reality Labs has lost a combined $70 billion U.S., according to Meta’s financial statements.
META stock is up 10% this year and trading at $661.53 U.S. per share.
Tech Insider
