Catenaa, Wednesday, December 10, 2025- Meta could gain fresh momentum if it reduces spending on its metaverse projects, analysts said in new research this week.
A note from Mizuho called Reality Labs an $80 billion drain on operations and said cuts of up to 30 percent would strengthen earnings.
The bank estimated the move could add about two dollars per share to 2026 results. It kept an Outperform rating with a target of $815 per share and a bullish case of $1,245 tied to faster AI growth.
Meta shares trade near $672, according to Google Finance. Analysts said investor sentiment has turned negative and many view a reduction in virtual reality spending as overdue. Leadership at Meta has flagged weak traction in mixed reality.
A memo from early 2025 warned that current work would be judged as either forward looking or a misadventure.
People familiar with internal planning said Meta is weighing cuts near 30 percent during budget talks for 2026. Reality Labs losses since 2021 have exceeded $70 billion.
A reduction could include layoffs early next year. The division’s Horizon Worlds platform has failed to gain broad users.
The broader metaverse sector has dropped. Tokens for virtual world projects have lost value. CoinGecko data shows the category below $3.2 billion after reaching more than $500 billion at the start of this year.
Analysts said shifting resources could boost Meta’s AI operations and support the stock.
