Meta Platforms Inc Cuts 30% of 2026 Metaverse Budget to Focus on AI
Written by Emily J. Thompson, Senior Investment Analyst
Source: Newsfilter
Updated: 47 minutes ago0mins
- Budget Adjustment: Meta plans to cut its 2026 Metaverse budget by 30% to allocate more resources towards its AI ambitions, thereby enhancing its competitiveness in the rapidly evolving AI market.
- Strategic Shift: By reducing investment in the Metaverse, Meta not only optimizes resource allocation but also accelerates the development of its AI projects, which is expected to elevate the company's market position in technological innovation.
- Market Reaction: Analysts have raised their ratings for Meta, reflecting a positive market perception of its new strategy, which could have a favorable impact on the company's stock price and bolster investor confidence.
- Future Outlook: This move indicates that Meta is reassessing its long-term strategy to focus on more promising AI technologies, which is anticipated to bring new growth opportunities and facilitate business transformation.
META.O
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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 838.14 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.
42 Analyst Rating
35 Buy
6 Hold
1 Sell
Strong Buy
Current: 661.530
Low
655.15
Averages
838.14
High
1117
Current: 661.530
Low
655.15
Averages
838.14
High
1117
Mizuho
Outperform
maintain
$815
2025-12-04
New
Reason
Mizuho
Price Target
$815
2025-12-04
New
maintain
Outperform
Reason
Mizuho reiterated an Outperform rating and $815 price target on Meta Platforms, saying the firm sees a "significant rally ahead" for the shares. The firm recommends investors add to positions in light of multiple press reports that the company plans to cut up to 30% out of Metaverse spending and was asking managers to identify broader cuts across the company. Metaverse cuts of this magnitude could add roughly $2 per share to the firm's 2026 EPS estimate of $29.50, with Reality Labs losses of roughly $5.85 per share, the analyst tells investors in a research note. The firm suspects some of this development is incremental, but ultimately the plan to cut back in an area viewed as a black hohe alone should give investors more confidence the move to scale up investment in generative AI is not a blank check forever.
BofA
Buy
maintain
$810
2025-12-04
New
Reason
BofA
Price Target
$810
2025-12-04
New
maintain
Buy
Reason
BofA reiterated a Buy rating and $810 price target on Meta after Bloomberg reported the company is evaluating up to a 30% reduction in the 2026 Metaverse budget. Since Q3 earnings, when Meta noted that total expenses would grow "significantly" faster in 2026 than in 2025, the stock has been under pressure, the analyst tells investors in a research note. The firm noted that the recent news will likely change assumptions on the magnitude of expense growth downside in 2026/2027 and reinforces the view that Meta remains financially disciplined.
Citi
Buy
maintain
$850
2025-12-04
New
Reason
Citi
Price Target
$850
2025-12-04
New
maintain
Buy
Reason
Citi keeps a Buy Rating and $850 price target on Meta Platforms following today's Bloomberg report that the company is planning a "meaningful" reduction of up to 30% at the Metaverse group. The potential significant cut from Metaverse investments clearly frees up resources for Super Intelligence Labs as newer AI products come to market in FY26, the analyst tells investors in a research note. The recent debate has focused on the mix of investment across Meta's core R&R improvements vs. Super Intelligence relative to revenue growth and the news today suggests Meta can deliver continued product-led growth as it reallocates resources to its greatest opportunities, the firm added.
Arete
Rocco Strauss
Neutral -> Buy
upgrade
$718
2025-12-04
New
Reason
Arete
Rocco Strauss
Price Target
$718
2025-12-04
New
upgrade
Neutral -> Buy
Reason
Arete analyst Rocco Strauss upgraded Meta Platforms to Buy from Neutral with a $718 price target.
See All Ratings
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
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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.
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