As of December 5, 2025
Meta Platforms, Inc. (NASDAQ: META) is back in the spotlight after a sharp move higher in its share price driven by reports of deep cuts to its metaverse budget and a renewed focus on artificial intelligence (AI) infrastructure and devices.
The stock closed around $661.5 per share on Thursday, December 4, 2025, up roughly 3–4% on the day, and extending a rebound from its late-October selloff. [1] Early indications on Friday show continued strength in pre-market and after-hours trading, reflecting investor approval of CEO Mark Zuckerberg’s latest strategic pivot.
META stock today: sharp rebound, still below record highs
Over the past few weeks, META shares have staged a notable recovery. Historical data show the stock closing at $661.53 on December 4, after trading in a range between about $660 and $676, marking a gain of more than 3% for the session. [2] Recent data also place Meta’s 52‑week range roughly between the high‑$470s and just under $800 per share, meaning the stock now trades well below its peak despite the latest rally. [3]
In terms of valuation, Meta’s market capitalization is currently around $1.6–1.8 trillion, with a price-to-earnings ratio near 30x based on recent earnings, putting it near the upper end of large-cap tech but still below some AI‑focused peers. [4]
The near-term driver of this move is not a sudden change in advertising demand, but rather a fundamental reset of Meta’s most controversial spending line: the metaverse.
Meta slashes metaverse budget by up to 30%
Multiple reports from major outlets indicate that Meta is planning deep cuts to its metaverse division, Reality Labs, as part of its 2026 budget planning. According to Bloomberg-linked reporting summarized by Reuters, executives are considering budget cuts as high as 30% for the metaverse group, with layoffs possible as early as January. [5]
Further reporting from The Verge and other outlets suggests that: [6]
- The cuts are focused on Reality Labs, which builds Quest VR headsets and the Horizon Worlds virtual environment.
- Reality Labs has accumulated tens of billions of dollars in losses since Meta rebranded from Facebook in 2021, with some estimates exceeding $70 billion.
- Zuckerberg has reportedly asked for at least 10% spending cuts across the company, but metaverse efforts are in line for the steepest reductions.
An Investopedia analysis notes that Meta’s metaverse push was originally framed as “the future of the company” and the inspiration for its name change, but investors have grown increasingly skeptical because of weak consumer uptake and limited competitive urgency in virtual reality. [7]
Markets are clearly welcoming the change: those same reports highlight that Meta’s stock rose about 4% on Thursday on the news of the potential 30% metaverse budget cut. [8]
AI becomes the new core spending priority
Metaverse cuts do not mean Meta is suddenly becoming a low‑capex company. Instead, the savings are being reallocated into AI:
- Meta has raised its 2025 capital expenditure forecast to a range of approximately $70–72 billion, up from previous guidance that started around $66 billion, explicitly citing additional data center investments and AI infrastructure hardware as the reason. [9]
- The company has launched a “Superintelligence Lab” and, according to Reuters, committed roughly $14.3 billion for a 49% stake in Scale AI, a large data‑labeling and AI infrastructure firm, as part of its push to compete in high‑end AI models and tooling. [10]
- New spending is also aimed at AI glasses and wearables, with the Wall Street Journal describing a reallocation inside Reality Labs from immersive virtual worlds to AI‑driven hardware that has clearer near‑term commercial potential. [11]
The message to investors: Meta is still willing to spend aggressively, but it will do so on AI infrastructure and devices rather than open‑ended metaverse experiments.
Regulatory overhang: EU antitrust probe into WhatsApp AI
The bullish narrative around spending cuts and AI is tempered by fresh regulatory risk. On December 4, the European Commission opened a formal antitrust investigation into Meta’s new policy governing AI chatbots on WhatsApp. [12]
Key elements of the probe include:
- A new policy announced in October 2025 that restricts third‑party AI providers from using a key WhatsApp Business API tool to reach customers directly in the EU, while Meta’s own “Meta AI” assistant retains access. [13]
- Concerns from EU competition authorities that the policy could unfairly disadvantage rival AI assistants and entrench Meta’s position in messaging and AI.
- A potential penalty of up to 10% of Meta’s global annual revenue if the company is ultimately found to have breached EU antitrust rules. [14]
Meta and WhatsApp have publicly pushed back, calling the claims “baseless” and arguing that the restrictions are driven by infrastructure constraints rather than an attempt to block competition. [15]
So far, markets appear to see the EU probe as manageable. Barron’s notes that an earlier €200 million EU fine had little impact relative to Meta’s multibillion‑dollar quarterly earnings, and Thursday’s stock move was still positive despite the new investigation. [16]
Earnings snapshot: strong margins, growing dividend
Underneath the noise about metaverse cuts and AI, Meta’s core business remains highly profitable.
Recent quarterly results (released in late October) showed: [17]
- Earnings per share (EPS) of $7.25, topping the consensus estimate of about $6.74.
- Revenue of $51.24 billion, up 26.2% year‑over‑year, driven by resilient digital advertising demand across Facebook, Instagram, and WhatsApp.
- A net margin near 31% and return on equity around 39%, underscoring Meta’s status as one of the most profitable large‑cap tech companies.
Meta has also quietly become a dividend payer. The company recently declared a quarterly dividend of $0.525 per share, or roughly $2.10 annually, which equates to a yield of about 0.3% at current prices and a payout ratio under 10%. [18]
Analysts expect full‑year EPS around 26–27, implying that even with heavy AI investments, Meta is generating substantial free cash flow that can support both shareholder returns and multi‑year capex.
What Wall Street’s META stock forecasts are saying
Wall Street remains broadly optimistic on Meta Platforms, but there is nuance beneath the headlines.
- Data compiled by StockAnalysis show that 43 analysts covering Meta have a consensus rating of “Strong Buy”, with an average 12‑month price target of about $820.9. Based on current prices near the low‑$660s, that implies roughly 24% upside over the next year. [19]
- MarketBeat’s tally of around 51 analysts characterizes the consensus as a “Moderate Buy”, with an average target just above $819, and only a small minority of Hold ratings. [20]
- TipRanks similarly reports an average price target around $835, based on recent 12‑month forecasts from more than 40 Wall Street analysts. [21]
Some houses are more aggressive:
- A recent report from 24/7 Wall St. pegs a one‑year META price forecast of about $875.46, implying nearly 37% upside, assuming Meta sustains strong ad revenue growth while boosting efficiency despite higher AI‑related capital expenditures. [22]
- Arete Research just upgraded Meta from “neutral” to “buy” with a $718 price target, arguing that the post‑earnings pullback and metaverse cuts improve the risk–reward profile. [23]
Beyond price targets, some long‑term models expect mid‑teens annual growth in both revenue and earnings for several years, with one widely used fundamental screen projecting earnings growth of roughly 15% per year and a future return on equity above 24%. [24]
In short: most analysts see META as a high‑quality, cash‑generative AI and advertising platform trading at a discount to its perceived long‑term growth trajectory—but with clear execution and regulatory risks.
Institutional positioning and insider activity: mixed but broadly supportive
Fresh filings highlight active repositioning around META in institutional portfolios:
- Financial Advocates Investment Management recently trimmed its stake by about 31.7%, selling more than 3,200 shares and ending Q2 with 7,042 shares valued at roughly $5.2 million. [25]
- By contrast, a series of other funds have increased their META exposure: Hillsdale Investment Management lifted its position by 271% to over 22,800 shares, Y.D. More Investments grew holdings by 6.7% to more than 40,000 shares, and Coldstream Capital and Columbus Hill Capital each reported mid‑single to low‑double‑digit percentage increases in their Q2 stakes. [26]
- Arvin Capital Management, on the other hand, reduced its META stake by nearly 89%, suggesting some investors are taking profits or reallocating after a strong multi‑year run in the stock. [27]
At the same time, insiders have been net sellers:
- MarketBeat data indicate that corporate insiders have sold roughly 42,000 shares of META stock over the past 90 days, worth about $26–27 million, though insiders still own more than 13% of the company. [28]
- Separate disclosures show Chief Legal Officer Jennifer Newstead sold 519 shares for approximately $333,000 in early December. [29]
Insider selling is not unusual after a strong share‑price run and the initiation of a dividend, but investors will be watching closely to see whether selling intensifies as the metaverse cuts and AI pivot play out.
Key opportunities and risks for META stock
From today’s vantage point, a few themes dominate the META investment story:
Opportunities
- AI‑driven ad performance: Meta’s AI‑powered advertising tools have already been credited with improving conversion rates and lowering cost per purchase for advertisers, strengthening its competitive moat against other digital ad platforms. [30]
- Reallocation from low‑return projects: Cutting a metaverse program that has collectively lost more than $60–70 billion over several years frees up capital for higher‑return AI, data center, and device investments. [31]
- Scale and data advantages: With billions of users across Facebook, Instagram, WhatsApp, and Messenger, Meta has a unique data set for training and deploying AI models, particularly in ad targeting and content recommendation.
Risks
- Regulatory and antitrust pressure: The new EU probe into WhatsApp’s AI policy adds to a crowded docket of investigations and potential fines in Europe and beyond. A worst‑case outcome could temporarily limit Meta’s rollout of AI assistants in key markets. [32]
- Capex fatigue and execution risk: Investors are currently applauding the metaverse cuts, but Meta is still planning tens of billions of dollars in annual AI capex. If those investments fail to translate into rising profits or new revenue streams, sentiment could reverse quickly. [33]
- Competitive intensity: Meta faces fierce competition from Alphabet, Apple, Microsoft, and others across AI models, hardware, and app ecosystems. A misstep in AI strategy could erode its long‑term edge.
Bottom line: What today’s news means for META stock
For now, markets are interpreting Meta’s metaverse pullback as a bullish reset: the company is reining in the most controversial part of its spending plan, reinvesting into nearer‑term AI opportunities, and doing so from a position of strong profitability and cash generation.
Analyst price targets clustered in the low‑ to mid‑$800s, combined with a current share price in the mid‑$600s, suggest that Wall Street still sees meaningful upside—provided Meta can navigate regulatory headwinds and execute on its AI roadmap. [34]
For investors and traders watching META today, the key questions are no longer just “Will the metaverse ever pay off?” but rather:
- How efficiently can Meta convert massive AI capex into new revenue and profit streams?
- How costly will incoming regulation be—especially from the EU?
- And can Meta continue to grow earnings at a mid‑teens pace while funding its AI ambitions?
References
1. stockanalysis.com, 2. stockanalysis.com, 3. www.marketbeat.com, 4. www.marketbeat.com, 5. www.reuters.com, 6. www.theverge.com, 7. www.investopedia.com, 8. www.investopedia.com, 9. 247wallst.com, 10. www.reuters.com, 11. www.wsj.com, 12. techxplore.com, 13. techxplore.com, 14. www.theverge.com, 15. techxplore.com, 16. www.barrons.com, 17. www.marketbeat.com, 18. www.marketbeat.com, 19. stockanalysis.com, 20. www.marketbeat.com, 21. www.tipranks.com, 22. 247wallst.com, 23. www.marketbeat.com, 24. simplywall.st, 25. www.marketbeat.com, 26. www.marketbeat.com, 27. www.marketbeat.com, 28. www.marketbeat.com, 29. www.investing.com, 30. seekingalpha.com, 31. www.reuters.com, 32. www.barrons.com, 33. 247wallst.com, 34. stockanalysis.com
