Meta Platforms Slips: Shutting Down Its VR Metaverse While Doubling Down on AI

Core Viewpoint - Meta Platforms is officially shutting down its VR metaverse, Horizon Worlds, and is pivoting towards artificial intelligence (AI) infrastructure and products, particularly AI glasses, which saw a significant sales increase in 2025 [1][2] Group 1: Financial Performance and Strategy - Meta Platforms reported a loss of $19.2 billion for Reality Labs in 2025, with Q4 revenue of only $955 million, prompting a shift in focus towards AI [1] - The company plans to increase capital expenditures to $115-$135 billion in 2026, up from $69.7 billion in 2025, indicating a major reallocation of resources towards AI [1] - The advertising business generated $200.97 billion in revenue for the full year 2025, with ad impressions increasing by 18% year-over-year in Q4 [1] Group 2: AI Infrastructure and Partnerships - Meta signed a $27 billion five-year revenue deal with Nebius to deploy NVIDIA GPUs starting in 2027, and a $6 billion multiyear partnership with Corning for optical fiber solutions [1] - The company aims to build its own AI compute stack rather than relying on external resources, reflecting a long-term commitment to AI infrastructure [1] Group 3: Product Development and Market Position - Meta's AI glasses sales tripled in 2025, and the company is opening a flagship retail store in New York City to showcase these products [1] - The AI initiative has already reached nearly 1 billion monthly active users as of Q1 2025, providing a competitive advantage in the AI market [1] Group 4: Analyst Sentiment - The analyst community is largely bullish on Meta, with a consensus price target of $862.25 and only a few Hold ratings among 62 analysts, indicating strong confidence in the company's future [1]