Meta Platforms Inc. (META) shares rose 7.3% following the company's announcement of sweeping cost reductions in its metaverse division, signaling a strategic shift toward profitability. Analysts now project the stock could reach $1,000 per share by 2026.
- Meta (META) stock rose 7.3% following cost-cutting announcement for Reality Labs
- Annual cost reductions of $3.2 billion, including 15% headcount cuts in metaverse division
- Reality Labs posted $2.1 billion in losses in 2024, prompting strategic pivot
- Core business revenue grew 19% year-over-year, driven by advertising
- Analysts project Meta stock could reach $1,000 per share by 2026
- Nasdaq-100 index rose 1.4% the day after announcement
Meta Platforms Inc. (META) posted a sharp rally in after-hours trading, gaining 7.3% on December 14, 2025, after revealing plans to cut $3.2 billion in annual expenses within its Reality Labs division. The move includes a reduction of 15% in headcount and the suspension of non-essential hardware development projects, reflecting a broader pivot away from long-term metaverse investments toward near-term financial discipline. The restructuring follows years of sustained losses in the metaverse segment, which recorded $2.1 billion in losses during 2024. By reducing operating costs and focusing on core revenue drivers like advertising and AI infrastructure, Meta aims to improve operating margins. The company reported a 12.5% increase in quarterly operating income in its core business, driven by a 19% boost in ad revenue from its Facebook, Instagram, and WhatsApp platforms. Analysts at multiple investment firms have revised upward their 2026 price targets for Meta stock. One firm estimates a $1,000 per share valuation by year-end 2026, based on a projected 25% compound annual growth rate in earnings per share, assuming disciplined spending and continued leadership in AI-driven advertising. This marks a 34% premium over the current market price and would make Meta the first U.S. tech stock to surpass $1 trillion in market capitalization in a single share value. The announcement has triggered a broad-based rally in the technology sector, with the Nasdaq-100 index gaining 1.4% the following day. Investors are reassessing growth strategies among large-cap tech firms, particularly those with high R&D exposure. The shift at Meta also raises questions about the pace of metaverse adoption and the viability of long-term digital infrastructure investments.