New York, Jan 14, 2026, 16:14 (EST) — Trading in after-hours
- Shares of Meta Platforms dropped 2.5% during regular hours, dragged down by fresh Reality Labs budget cuts and a wider tech sell-off on Wall Street.
- Meta scheduled its quarterly earnings for Jan. 28, a key moment to gauge spending discipline amid its AI infrastructure build-out.
Meta Platforms shares dropped roughly 2.5% on Wednesday, marking another turbulent session for the social media giant amid its move to scale down segments of its metaverse business. The stock ended the day at $615.38.
The cuts are crucial as Meta works to reassure investors while funneling cash into AI infrastructure, all while pledging to manage margins. Reality Labs has been a major spending driver, so even a slight signal of stricter cost control tends to move the stock sharply.
U.S. stocks dropped Wednesday, dragged down by tech and financial sectors. The Nasdaq slid 0.96%, while the S&P 500 slipped 0.53%, based on preliminary figures. (Reuters)
Meta is cutting roughly 10% of its Reality Labs division—the team behind its virtual and augmented reality gear—and will close several VR game studios in the process. Meta spokesperson Tracy Clayton told The Verge the company is pivoting investment “from the Metaverse toward Wearables,” with plans to funnel savings back into growing its wearables business. (The Verge)
Reality Labs has been the core of Meta’s efforts to expand beyond Facebook and Instagram, spanning from Quest headsets to software and gaming content. Shutting down studios could dry up the flow of new VR titles, even as Meta doubles down on smart glasses and other gadgets designed to lock users into its ecosystem.
Meta is pushing hard on scaling its AI computing power. CEO Mark Zuckerberg unveiled a new “Meta Compute” program this week to manage data centers and supplier deals. The company aims to crank out “tens of gigawatts this decade,” with even more down the line. Infrastructure head Santosh Janardhan and Daniel Gross will co-lead the effort, alongside Dina Powell McCormick, recently appointed president and vice chairman, Zuckerberg wrote. (Reuters)
Meta, alongside Microsoft, Alphabet, and Amazon, is battling for chips, power, and data-center space amid a fresh surge in generative AI-driven capital spending. This scramble has intensified investor scrutiny on capex—and its impact on free cash flow—even among firms with robust ad revenues.
Meta announced after the close that it plans to release its fourth-quarter and full-year 2025 earnings on Wednesday, Jan. 28, followed by a conference call at 4:30 p.m. ET. (AtMeta)
Another SEC filing revealed insider selling under a pre-established plan. Meta’s Jennifer Newstead submitted a Form 144 on Jan. 13 for a proposed sale of 519 Class A shares valued at roughly $332,679. The filing confirmed these shares would be sold pursuant to a Rule 10b5-1 trading plan, letting executives schedule trades ahead of time. (SEC)
The immediate issue for traders is whether Reality Labs’ cuts are a one-time cleanup or the beginning of a broader pullback. If demand for wearables slows or VR expenses remain sticky, Meta might just shift savings from one bucket to ramp up AI investments, leaving total costs elevated.
Jan. 28 is the next major date to watch. Investors will be focused on any changes to capex plans, the speed of AI infrastructure expansion, and whether management signals more restructuring in Reality Labs alongside updates on the core ad business.
