"Strong quarterly reports earlier in 2025 (despite a tax charge) had lent credence to the claim that Meta would continue to outshine its competitors over the coming year. The share price hit an all-time high of $796.25 back in August. The stock is still trying to recover from the pullback in November, and it is now up 3.6% year over year, underperforming the broader market. Furthermore, the near-term future of the economy is uncertain-just like the markets themselves-and Meta Platforms CEO Mark Zuckerberg is a controversial figure. Certainly, Zuckerberg's sudden shift to the metaverse and brand name change to Meta Platforms raised a few eyebrows several years ago."
"Let's start by addressing the elephant in the room. Investors should not rely on Meta Platforms' Reality Labs metaverse business to drive the company's near-term future growth. In Q3 2025, Reality Labs generated $470 million in revenue, up from $370 million in revenue in the prior quarter. However, during that same time frame, Reality Labs recorded a loss from operations of $4.43 billion."
Meta's third-quarter earnings raised investor concerns about massive capital spending on artificial intelligence initiatives and prompted plans to cut Reality Labs' budget. The stock declined 18% after the quarterly report, despite earlier strong 2025 results and a peak share price of $796.25 in August. The stock remains up 3.6% year over year but is underperforming the broader market amid economic uncertainty and controversy around CEO Mark Zuckerberg's strategic shifts. Reality Labs produced $470 million in Q3 2025 revenue but reported a $4.43 billion operating loss. Investors are urged to consider a wide range of price targets and strategies given the mixed signals.
Read at 24/7 Wall St.
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