Meta Stock 2026: Why the Shift to AI and Wearables Could Boost Growth
- Why Is Meta Restructuring Reality Labs?
- How Bad Were Reality Labs’ Losses?
- What Are Analysts Saying About Meta’s Stock?
- Where Does Meta’s Stock Stand Technically?
- What to Watch in Meta’s Q4 2025 Earnings (January 28)
- Is Meta Stock a Buy or Sell?
- Meta Stock 2026: Your Questions Answered
Meta is making bold moves to pivot from its costly Metaverse ambitions toward AI and wearables, cutting 1,000 jobs and closing VR studios. Analysts remain bullish, with a median price target of $806 (30% upside). The Q4 2025 earnings report on January 28 will test investor confidence in this strategic shift. Here’s what you need to know.
Why Is Meta Restructuring Reality Labs?
Meta’s Reality Labs division, long criticized for burning cash, is undergoing a radical overhaul. On January 16, 2026, the company announced 1,000 layoffs (10% of the unit’s workforce) and shuttered three VR game studios—Armature Studio, Twisted Pixel, and Sanzaru Games—acquired between 2020 and 2022. Projects at Camouflaj (developer of) were also scaled back. A Meta spokesperson confirmed resources are being redirected to AI-driven hardware and wearables, notably the Ray-Ban Meta Smartglasses collaboration with EssilorLuxottica. "This isn’t just cost-cutting; it’s a recalibration toward profitability," an insider told TradingView.
How Bad Were Reality Labs’ Losses?
Since 2020, Reality Labs has hemorrhaged over $70 billion, including a $4.43 billion loss in Q3 2025 alone. Investors cheered the restructuring, sending shares up 5% intraday. "The Metaverse was a money pit," said BTCC analyst David Lin. "AI and wearables have clearer monetization paths." Meta’s Q3 revenue grew 26% YoY to $51.2 billion, but planned 2025 investments of $70–$72 billion sparked backlash. Now, the focus is on practical AI devices over experimental VR.
What Are Analysts Saying About Meta’s Stock?
Wall Street remains optimistic:
- Rosenblatt Securities reiterated a $1,117 price target (the highest on Wall Street) on January 14.
- TD Cowen raised its target to $820 on January 13.
- Wells Fargo trimmed its target to $795 but kept a "Buy" rating.
Where Does Meta’s Stock Stand Technically?
After a recent pullback, Meta’s stock is stabilizing:
- Current Price: $615.52 (13% below its 52-week high, but well above lows).
- Key Levels: Support at $600; resistance at $625. A breakout could target $700.
- RSI: 47.1 (neutral momentum).
What to Watch in Meta’s Q4 2025 Earnings (January 28)
Three critical factors:
- Capex Guidance for 2026: Will savings from Reality Labs cuts fund AI infrastructure?
- Ad Revenue Growth: Can AI tools like Advantage+ deliver higher ROI for advertisers?
- Wearables Momentum: Updates on Ray-Ban Smartglasses sales (rumored to target "tens of millions" annually).
Is Meta Stock a Buy or Sell?
The BTCC team leans bullish: "Meta’s AI bets are more pragmatic than the Metaverse ever was." But risks remain—if AI spending doesn’t yield quick returns, shares could retest $480. For now, the market is giving Zuckerberg the benefit of the doubt.
Meta Stock 2026: Your Questions Answered
Why did Meta cut jobs in Reality Labs?
To curb losses ($70B+ since 2020) and refocus on profitable AI/wearables projects like Ray-Ban Smartglasses.
What’s Meta’s highest analyst price target?
Rosenblatt’s $1,117 target implies ~80% upside from current levels.
When is Meta’s next earnings report?
January 28, 2026—watch for updates on AI ad tools and wearables sales.
