Wall Street is sending a clear signal to Meta Platforms that it wants the company to reduce spending on Reality Labs.Meta Platforms (META 0.91%) shares popped 3.4% on Thursday despite a mere 0.22% increase in the Nasdaq Composite on reports that the company was cutting metaverse spending in favor of artificial intelligence (AI) and smart glasses.Here's why Meta's capital is better used on non-metaverse projects and why the growth stock is a great buy in December. The harsh reality of Reality LabsFacebook c ...

Core Viewpoint - Nebius Group reported significant revenue growth but also wider losses due to increased capital expenditures for AI infrastructure development, while securing a major deal with Meta Platforms for AI services [1][2][4][7]. Financial Performance - Revenues for the third quarter reached $146.1 million, a 355% increase year-over-year, with a year-to-date revenue increase of 437% from $56.3 million in 2024 to $302 million in 2025 [4]. - The company reported a net loss of $119.6 million, a 174% increase from last year's loss of $43.6 million, with an adjusted net loss of $100.4 million compared to $39.7 million in the same quarter last year [4]. Capital Expenditures and Infrastructure - Nebius spent $955.5 million on capital expenditures in the quarter, up from $172.1 million a year ago, and has plans to increase its data center power capacity from 220 megawatts to between 800 megawatts and 1 gigawatt by the end of 2026 [5]. - The CEO emphasized that 2025 is a foundational year for future growth, aiming for a strong position in the AI cloud market by 2026 [6]. Strategic Partnerships - The company announced a $3 billion deal with Meta Platforms to provide AI infrastructure over five years, following a previous deal with Microsoft valued between $17.4 billion and $19.4 billion [2][7]. - Both deals are expected to significantly impact Nebius' financials by 2026, aiding in data center expansion and profitability [8]. Market Outlook - Nebius anticipates an annualized run rate revenue between $7 billion and $9 billion by the end of 2026, positioning itself as a key player in the rapidly growing AI market, projected to expand from $279.22 billion in 2024 to $3.5 trillion by 2033 [7][8].

Group 1: Meta's Recruitment Efforts - Meta is reportedly offering signing bonuses of up to $100 million to attract talent from competitors, as stated by OpenAI CEO Sam Altman [2][3] - Altman mentioned that Meta views OpenAI as its biggest competitor and has been aggressive in its recruitment strategy [2] - Meta CEO Mark Zuckerberg is personally involved in interviewing candidates for a new team focused on developing artificial general intelligence [4] Group 2: Investment and Talent Acquisition - Meta has announced a $15 billion investment in data-labeling startup Scale AI, with expectations that Scale AI's co-founder and employees will join Meta [4] - Some AI experts, such as Jack Rae from Google DeepMind, have accepted offers to join Meta, indicating some success in their recruitment efforts [4] Group 3: Challenges Faced by Meta - Meta has encountered setbacks in its AI initiatives, including allegations of inflating performance metrics for its Llama large language model [5] - The company has faced criticism for not providing a comprehensive technical report to accompany its AI model [5]