Meta Shifts Metaverse Strategy Towards AI Focus
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 18 2026
0mins
Should l Buy META?
Source: Yahoo Finance
- Metaverse Strategy Shift: Meta announced the removal of access to Horizon Worlds from Quest headsets, preventing users from building, publishing, or updating virtual environments, indicating a significant de-emphasis on the metaverse in favor of AI initiatives.
- Mobile-First Transition: Horizon Worlds will only be accessible through Meta's mobile app, reflecting a strategic pivot towards mobile experiences that align with changing user behaviors and preferences.
- Job Cuts and Restructuring: Meta has laid off 1,000 employees within Reality Labs and shut down parts of its virtual reality gaming and content operations, highlighting a major shift in resource allocation aimed at improving operational efficiency.
- Future Product Focus: Leadership has indicated a stronger emphasis on mobile-first experiences and AI-related wearable products, such as Ray-Ban Meta glasses, suggesting a redefinition of Meta's long-term growth narrative in the evolving tech landscape.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 678.620
Low
655.15
Averages
824.71
High
1117
Current: 678.620
Low
655.15
Averages
824.71
High
1117
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.
- Earnings Expectations: Meta is expected to report adjusted EPS of $8.15 and revenue of $55.5 billion for Q1, a significant increase from last year's $42.3 billion, reflecting the company's ongoing investments in AI and rising market demand.
- Cost Control Measures: The company plans to cut 8,000 jobs, or 10% of its workforce, and eliminate 6,000 open positions, a move aimed at enhancing operational efficiency and offsetting costs from other investments, demonstrating Meta's commitment to its transformation.
- Future Spending Forecast: Meta anticipates total expenses for 2026 to range between $162 billion and $169 billion, with capital expenditures projected at $115 billion to $135 billion, and investors will closely monitor updates to these figures to assess the company's financial health.
- Industry Competitive Dynamics: Alongside peers like Microsoft, Amazon, and Alphabet, Meta has pledged to spend over $650 billion on AI investments by 2026, underscoring the company's significant position in the global AI investment wave and its strategic focus on future growth.
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Meta's Strategic Shift: Meta is preparing to undo its acquisition of a company following a ban imposed by China.
Impact of Regulatory Actions: The situation highlights the challenges tech companies face in navigating international regulations and market access.
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- Focus on Revenue Growth: Alphabet, Amazon, Microsoft, and Meta all achieved double-digit revenue growth in their latest quarters, with Alphabet's Q4 revenue up 18% and Google Cloud soaring 48%, indicating strong market demand that is expected to drive overall performance.
- Capital Expenditure Pressure: The combined capital expenditures of these four companies are projected to exceed $600 billion in 2026, with Alphabet planning $175 billion to $185 billion, Amazon around $200 billion, Meta between $115 billion and $135 billion, and Microsoft estimated at about $130 billion, which will significantly impact future depreciation expenses.
- Operating Income Expectations: Meta anticipates its 2026 operating income will exceed 2025 levels despite increased spending, while Amazon's Q1 operating income guidance ranges from $16.5 billion to $21.5 billion, demonstrating the company's ability to absorb new costs.
- Market Volatility Risks: As these four companies report earnings after market close, investors should brace for potential high volatility, especially given the backdrop of record AI infrastructure spending, making the earnings results critical for market impact.
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- Capital Expenditure Plans: The combined capital expenditure plans for the four tech giants in 2026 could exceed $600 billion, with Alphabet planning to spend between $175 billion and $185 billion, nearly doubling its 2025 expenditure, indicating strong confidence in future growth.
- Revenue Growth Expectations: Meta's first-quarter revenue guidance of $53.5 billion to $56.5 billion implies a remarkable 30% year-over-year growth compared to last year's $42.3 billion, suggesting that its investments in AI are beginning to pay off, potentially boosting market confidence in its long-term growth.
- Market Volatility Warning: As these four companies report earnings on Wednesday, investors should brace for significant market volatility, especially given their trillion-dollar market capitalizations, where any failure to meet expectations could trigger panic selling.
- Operating Income Outlook: Despite the high capital expenditures, Meta expects its operating income in 2026 to exceed 2025 levels, while Amazon's first-quarter operating income guidance ranges from $16.5 billion to $21.5 billion, indicating growth potential even amid new project cost pressures.
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- Market Weakness: The MSCI index for Asia-Pacific shares outside Japan fell by 0.2%, retreating for the second consecutive day from record highs set on Monday, primarily driven by declines in Taiwanese chipmakers, indicating growing concerns about future economic prospects.
- Iran Conflict Impact: Market sentiment remains cautious as peace talks between Iran and the U.S. stall, with analysts noting that Trump's dissatisfaction with the latest proposal could lead to an extended blockade of Iran, thereby increasing market uncertainty.
- Tech Sector Pressure: Reports that OpenAI missed internal targets for user growth and revenue have weighed on tech stocks, particularly impacting shares of Oracle and CoreWeave, reflecting investor concerns about the sustainability of the AI sector.
- Federal Reserve Meeting Focus: Attention shifts to the Federal Reserve's meeting, where a hold on interest rates is expected; analysts suggest that in the current high-inflation environment, the Fed may adopt a hawkish stance, further influencing market sentiment.
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- UAE Exits OPEC: The UAE's announcement to exit OPEC on May 1 could lead to increased volatility in oil prices, as it is one of the few producers with significant spare capacity to influence market dynamics, thereby having a profound impact on global oil markets.
- Escalating Market Warnings: Billionaire investor Ray Dalio has warned of potential stagflation in the U.S. economy, while JPMorgan CEO Jamie Dimon cautioned that rising government debt could trigger a bond market crisis, indicating that intensifying macroeconomic risks may shift market sentiment towards caution.
- Chip Market Turmoil: Despite rising geopolitical and macroeconomic risks, the market experienced a sell-off in chip stocks after OpenAI fell short of user growth and revenue projections, highlighting a shift in market psychology where investor focus on the AI sector continues to drive volatility.
- China's Restrictions on U.S. Acquisitions: China's decision to block Meta's $2 billion acquisition of AI startup Manus is seen as a warning to tech entrepreneurs, indicating that companies starting in China will face stricter regulatory environments, potentially affecting future investment decisions.
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