Remember when the entire investing world collectively rolled its eyes every time someone mentioned the word “metaverse”? Yeah, me too. It felt like we were all watching a very expensive sci-fi movie that nobody asked for, funded directly out of our portfolios. Fast forward to today, and something remarkable just happened: the stock of the company behind that grand vision jumped more than 5% in a single morning. Why? Because the CEO finally admitted—without exactly saying the words—that maybe, just maybe, burning $70 billion on virtual land nobody visits wasn’t the best use of shareholder money.
That’s the story hitting trading desks right now. Reports surfaced that Mark Zuckerberg is preparing to cut spending in the metaverse division by as much as 30%. For many investors, this feels less like news and more like sweet, long-overdue relief.
The Moment Investors Have Been Waiting For
Let’s be honest—most of us never truly bought the vision of logging off real life to hang out in a cartoon boardroom wearing $1,500 headsets. Sure, the technology is impressive. Yes, someday it might even be revolutionary. But when your core advertising business is printing cash, and one division is hemorrhaging billions with no realistic timeline for profitability, patience wears thin pretty fast.
The division in question—Reality Labs—has now lost more than $70 billion since it was carved out for special attention a few years ago. In the most recent quarter alone, the loss topped $4.4 billion. Those aren’t rounding errors. That’s real money that could have gone to buybacks, dividends, or frankly anything with a clearer path to returns.
So when word spread that Zuckerberg is ready to turn down the burn rate significantly, the market didn’t hesitate. Shares ripped higher before most of us finished our first coffee. And honestly? It felt good.
From “Limitless Horizon” to Hard Financial Reality
It wasn’t always this way. There was a time—not that long ago—when talking about the metaverse sent the stock flying. Early renderings of Horizon Worlds looked futuristic. The Oculus acquisitions seemed visionary. The rebrand from Facebook to Meta was meant to signal that something monumental was coming.
Then reality set in. Users logged in, looked around at the legless avatars and empty digital plazas, and promptly logged out—forever. Adoption never materialized at scale. Meanwhile, interest rates shot higher, capital became expensive, and suddenly every dollar spent on a distant dream had an opportunity cost measured in very real buybacks forgone.
The market can stay irrational longer than you can stay solvent—but eventually, even the most patient investors want to see a path to profit.
That quote has never felt more relevant.
What Actually Changes Now?
The important detail hiding in all the celebration: this isn’t necessarily Zuckerberg abandoning the long-term vision. It’s him becoming far more methodical about how he gets there.
Think of it this way. You don’t build a fully immersive digital world without massive advances in artificial intelligence, lightweight hardware, and seamless interfaces. All the R&D that went into Quest headsets and Horizon environments still matters—it just doesn’t need its own unlimited budget while the core ads business funds everything else.
- Smart glasses (the Ray-Ban Meta stories that people actually wear in public) stay fully funded.
- AI infrastructure build-out continues at warp speed.
- Mass-market display glasses are apparently still very much on the roadmap.
- Pure metaverse “world-building” takes a back seat until the tech stack matures and monetization becomes obvious.
In my view, this is maturity, not surrender.
The Math Investors Love
Wall Street loves simple math, and the math here is delicious.
One bulge-bracket firm already ran the numbers: a 20-30% cut in Reality Labs spending could add roughly $2 per share to 2026 earnings. Apply a completely reasonable 20-25x multiple on those incremental earnings and you’re looking at $40-$50 of additional fair value—purely from spending discipline.
That’s not even counting the sentiment lift. Meta shares are down more than 20% from their post-earnings peak despite delivering what most would call a blow-out quarter. The only real sin? Guiding to even higher AI capex. Investors heard “more spending” and panicked.
Today’s rally feels like the market saying: “Okay, we see the guardrails now. We can live with ambitious AI investment if you stop lighting cash on fire in a parallel universe nobody visits.”
Why Smart Glasses Might Be the Real Trojan Horse
Here’s where it gets interesting for the long-term bulls (myself included).
The Ray-Ban Meta glasses have quietly become a hit. People wear them. Celebrities post with them. The camera is useful, the AI assistant is getting better every month, and crucially—they don’t scream “I’m living in the metaverse.” They just feel like cool sunglasses.
That’s the bridge. Start with hardware people actually want today. Improve the AI until it’s indispensable. Add lightweight displays when the tech is ready. By the time a true mixed-reality experience arrives, hundreds of millions of users will already be in the ecosystem—without ever needing to hear the word “metaverse” again.
Zuckerberg hasn’t abandoned the destination. He’s just chosen a smarter route.
Valuation: Still Ridiculously Attractive
Let’s zoom out for a second. Even after today’s move, Meta trades around 22 times 2026 earnings. The broader market sits at similar multiples while growing earnings half as fast. Meta is guiding to 15%+ revenue growth with operating margins that should expand meaningfully as Reality Labs spending normalizes.
Translate that into free-cash-flow yield and you’re looking at one of the most compelling large-cap growth stories on the board—especially now that the biggest overhang appears to be lifting.
I’ve owned Meta shares for years, through the 2022 carnage and the 2023 rebound. Watching management learn in public hasn’t always been pretty. But moments like this—when a founder who once seemed stubbornly married to a vision shows willingness to adapt—are exactly the moments that separate great long-term investments from mediocre ones.
The metaverse isn’t dead. It’s just growing up. And if growing up means spending shareholder capital more wisely, then count me—and apparently the entire market today—among the thrilled.
Sometimes the best trade isn’t finding the next big thing. It’s watching a visionary finally focus on the things that actually make money today while keeping the dream alive for tomorrow. That feels like exactly where we are right now.
And if the past is any guide, stocks that trade at reasonable multiples while cleaning up their biggest problem tend to do one thing very well: go up.
A lot.
