Meta Cuts 10% of VR Staff to Focus on Mobile Game Development

Written by Emily J. Thompson, Senior Investment Analyst

META-1.69%

RBLX+10.53%

GOOGL+1.24%

Source: Newsfilter

Updated: 1h ago

0mins

Source: Newsfilter

Layoff Announcement: Meta plans to cut about 10% of its workforce, impacting over 1,000 jobs in virtual reality, indicating a significant shift in its metaverse strategy that may affect hardware production capabilities.
Strategic Shift: The company is reallocating resources from VR to artificial intelligence, raising its 2025 capital expenditure forecast to between $70 billion and $72 billion, reflecting a strong commitment to AI technology and anticipated future growth.
Mobile Game Development: Meta is courting Roblox developers to create mobile experiences for Horizon Worlds, aiming to attract a younger audience by emulating Roblox's success, despite Horizon's active user base being significantly lower than Roblox's.
Market Challenges: Meta's Reality Labs has logged over $70 billion in cumulative losses since 2020, with the latest quarterly report showing a $4.4 billion loss, highlighting ongoing challenges in the VR space and an urgent need to pivot towards mobile markets.

Analyst Views on META

Wall Street analysts forecast META stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for META is 832.06 USD with a low forecast of 655.15 USD and a high forecast of 1117 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

43 Analyst Rating

36 Buy

6 Hold

1 Sell

Strong Buy

Current: 641.970

Low

655.15

Averages

832.06

High

1117

Current: 641.970

Low

655.15

Averages

832.06

High

1117

Guggenheim

Buy

downgrade

$875 -> $800

2026-01-08

Reason

Guggenheim

Price Target

$875 -> $800

2026-01-08

downgrade

Buy

Reason

Guggenheim lowered the firm's price target on Meta Platforms to $800 from $875 and keeps a Buy rating on the shares. The firm's lowered target reflects its assumption of higher investment levels on "relatively unproven projects," but the 2026 outlook for Meta operating trends "remains constructive," the analyst tells investors.

Cantor Fitzgerald

Overweight

maintain

$720 -> $750

2026-01-08

Reason

Cantor Fitzgerald

Price Target

$720 -> $750

2026-01-08

maintain

Overweight

Reason

Cantor Fitzgerald raised the firm's price target on Meta Platforms to $750 from $720 and keeps an Overweight rating on the shares. Despite lingering macro concerns, the outlook for Global Internet stocks into 2026 is increasingly positive as AI enters a "Synergy" phase that should drive accelerating revenue growth, improved value capture, and clearer long-term returns on capex, the analyst tells investors in a research note. With valuations still about 20% below medium-term ranges despite 2025 outperformance, the group is positioned to outperform in 2026 amid positive estimate revisions and improving sentiment, Cantor says.

Wolfe Research

Outperform

downgrade

$850 -> $800

2026-01-05

Reason

Wolfe Research

Price Target

$850 -> $800

2026-01-05

downgrade

Outperform

Reason

Wolfe Research lowered the firm's price target on Meta Platforms to $800 from $850 and keeps an Outperform rating on the shares. 2026 could be another positive year for Internet stocks, though maybe not as much outperformance as the prior three years given current, elevated multiples for some of the firm's coverage, the analyst tells investors in a research note. The firm added that it sees opportunities for estimates upside driven by AI developments and product catalysts, a relatively healthy macro backdrop, successful capital allocation, and pockets of re-rating potential.

Baird

Colin Sebastian

Outperform

downgrade

$820 -> $815

2025-12-23

Reason

Baird

Colin Sebastian

Price Target

$820 -> $815

2025-12-23

downgrade

Outperform

Reason

Baird analyst Colin Sebastian lowered the firm's price target on Meta Platforms to $815 from $820 and keeps an Outperform rating on the shares. The firm updated its model along with framing the bull/bear debate heading into 2026.

About META

Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.