Meta Stock Price Soars as Zuckerberg Eyes Deep Metaverse Spending Cuts

Meta’s stock price jumped roughly 6% in morning trading Thursday. The surge followed a report detailing CEO Mark Zuckerberg’s plan to slash spending on the metaverse. This signals a major strategic shift for the social media giant. Investors are cheering the potential move toward fiscal discipline.The news, reported by Bloomberg, indicates executives are discussing significant budget reductions. These cuts would target the company’s Reality Labs division. Wall Street has long pressured Meta to curb losses in its virtual reality ambitions.

The Details Behind the Planned Spending Shift

Bloomberg’s sources indicate budget cuts could reach up to 30% for the metaverse group. This would potentially start in 2026. The discussions include the possibility of employee layoffs as part of the restructuring.The planned pullback highlights the immense financial burden of Reality Labs. The division has lost billions since its major push began in 2020. According to Reuters, the unit posted a $4.4 billion loss in Q3 2025 alone.Despite heavy investment, revenue from metaverse products remains minimal. Reality Labs generated just $470 million in that same quarter. This stark contrast has fueled investor skepticism for years.

Why Investors Are Applauding the Move

The positive stock reaction reveals a clear market preference. Investors value profitability over speculative, long-term moonshots. Meta’s core advertising business on Facebook and Instagram remains immensely profitable.Redirecting funds from Reality Labs could boost earnings per share. It also allows more capital to flow to artificial intelligence initiatives. AI is seen as a more immediate and commercially viable growth arena.This is not Meta’s first efficiency drive. Zuckerberg previously declared a “Year of Efficiency.” That initiative included widespread layoffs across the company. The new plan extends that philosophy to its most costly experimental division.

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The surge in Meta stock price underscores a pivotal moment, where financial pragmatism appears to be overtaking long-held metaverse ambitions, reshaping the company’s investment priorities for the foreseeable future.

Info at your fingertips

What is Reality Labs?

Reality Labs is Meta’s division focused on virtual and augmented reality. It develops hardware like Quest headsets and software for the metaverse. The unit has been a major financial drag on Meta’s overall profits.

Why did Meta stock go up on news of cuts?

Investors viewed the spending cuts as positive for Meta’s bottom line. It signals management is listening to calls for fiscal responsibility. Money saved can be used for share buybacks or more profitable AI projects.

How much has Meta spent on the metaverse?

Cumulative spending is estimated around $60 billion since 2020. This massive investment has resulted in steep, ongoing quarterly losses. The scale of spending has been a persistent concern for analysts.

What will Meta focus on instead?

The company is pivoting resources toward artificial intelligence development. This includes AI for advertising, content recommendation, and AI assistant products. These areas promise faster and clearer returns on investment.

Are layoffs definitely happening?

Bloomberg reported layoffs are part of the discussed plans for 2026. However, formal decisions may not be finalized. The talks reflect a serious evaluation of the division’s size and cost structure.

Is Meta giving up on the metaverse entirely?

No, but the company is likely scaling back its ambitions and spending pace. Development will continue, but with a tighter budget and greater focus on a path to profitability.