What Happened?
Shares of social network operator Meta Platforms (NASDAQ:META) jumped 3.6% in the afternoon session after reports indicated the company planned significant budget cuts for its metaverse division, Reality Labs.
The division, which has lost more than $70 billion since 2021, faced potential spending reductions of up to 30% for 2026. This news signaled a company pivot away from heavy metaverse investments and toward an increased focus on artificial intelligence (AI). Investors reacted positively to this re-evaluation of spending on the money-losing unit. The company's push into AI was seen as a key driver, with more of its spending expected to be allocated to AI project development. This move suggested a greater emphasis on improving financial performance.
The shares closed the day at $661.70, up 3.5% from previous close.
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What Is The Market Telling Us
Meta’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 3.5% on the news that renewed enthusiasm for Alphabet reinvigorated the artificial intelligence trade, propelling a market rebound heading into the Thanksgiving holiday. The Nasdaq index jumped 2.6% and the S&P 500 gained 1.6%, driven by a 5% rally in Alphabet following the announcement of its upgraded Gemini 3 AI model. This optimism spilled over into the broader tech sector. The rally built on momentum from the previous trading session, sparked by the New York Fed president keeping the door open for a December interest rate cut.
Meta is up 10.5% since the beginning of the year, but at $662.44 per share, it is still trading 16.1% below its 52-week high of $790 from August 2025. Investors who bought $1,000 worth of Meta’s shares 5 years ago would now be looking at an investment worth $2,368.
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