Will Meta Platforms' Metaverse Restructuring Drive Stock Growth in 2026?

Meta Platforms embarked on an ambitious transformation in 2021, betting heavily on the metaverse as its next frontier. The company rebranded itself from Facebook to Meta Platforms, signaling its commitment to this emerging technology. However, five years later, the metaverse division has become more costly than rewarding, raising questions about whether the company’s strategic pivot was premature.

Reality Labs Adjusts Its Metaverse Strategy While Cutting Costs

While Meta hasn’t abandoned the metaverse entirely, it’s clearly recalibrating priorities. According to reports from late 2025, the company announced a 10% workforce reduction in its Reality Labs division—the business unit responsible for metaverse development. Rather than exiting the segment completely, Meta is redirecting savings toward augmented reality (AR) glasses development, suggesting a shift in focus rather than a full retreat.

This move signals that Meta is becoming more disciplined with metaverse spending, but it doesn’t represent the wholesale abandonment many investors hoped for. The company continues to balance its commitment to metaverse technology with newer priorities like artificial intelligence, where it has dramatically increased investment.

Reality Labs Bleeding Billions While Core Business Thrives

The financial picture reveals the true cost of Meta’s metaverse ambitions. In 2025, Reality Labs posted losses of $19.2 billion, up 8% from $17.7 billion the previous year. By contrast, Meta’s Family of Apps segment—which includes Facebook, WhatsApp, Instagram, and Messenger—generated $102.5 billion in profit over the same period.

This stark disparity highlights a fundamental inefficiency: Meta’s highly profitable social media platforms are essentially subsidizing losses from its metaverse division. The company could significantly improve its profitability by either exiting the metaverse segment or achieving meaningful breakthroughs that justify the ongoing investment. Until management commits to a clear path forward, shareholders should question whether these resources could be better deployed elsewhere.

The Fundamental Question: Can Meta Manage Dual Investments?

The real concern for investors isn’t the layoffs themselves—it’s Meta’s simultaneous commitment to both metaverse development and aggressive AI spending. While AI investments may prove transformative, pouring billions into both areas raises questions about operational efficiency and strategic focus.

The recent Reality Labs adjustments might ease investor concerns marginally, but they fall short of addressing the core issue: Meta’s willingness to sustain ongoing losses in a speculative technology sector while the company still searches for monetization pathways. These cuts alone likely won’t be sufficient to make Meta an attractive buy in 2026 unless the company demonstrates genuine breakthroughs or announces a timeline for achieving profitability in its metaverse operations.

For investors evaluating Meta Platforms today, the metaverse uncertainty remains a significant headwind. More compelling opportunities may exist elsewhere, particularly among companies with clearer paths to profitability and less capital tied up in unproven technologies.