How Has Meta’s Story Changed?
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Meta Platforms (META) stock trades at 20.5 times earnings, compared with 22.9 for the S&P 500. Shareholders paying that price need to know what they are buying, and what management talks up has changed. On its fiscal Q4 2024 call in January 2025, management said, “This is also going to be a pivotal year for the metaverse.” On its October 21, 2026 call, the company emphasized something else. The word metaverse last came up on Meta’s April 2026 call. So what has taken the metaverse’s place?
Meta Now Emphasizes Superintelligence Over The Metaverse
Management now talks up what it calls personal superintelligence, describing its new AI agent, Muse, as the product that delivers that idea. Meta reports two businesses: Family of Apps, which covers its apps and the ads on them, and Reality Labs, which sells Quest headsets and AI glasses.
Reality Labs is where the change shows. On the fiscal Q1 2026 call in April 2026, management said it was working to make its virtual reality business sustainable while investing more in AI and glasses. By the October call, management said personal superintelligence is now also the focus of Reality Labs. Meta will pace its virtual reality spending to deliver personal superintelligence first, management added, and will ship new virtual reality devices only when it has major breakthroughs.
Management pointed to early uptake for the new product. In a month and a half, more than 10 million people in the US and Canada set up Muse personal agents.
How Big Are Meta’s Old And New Bets?
Reality Labs generated $443 million in fiscal Q3 2026 revenue, a sliver beside the $64.2 billion the Family of Apps brought in. While Family of Apps grew 26%, Reality Labs revenue fell 6% from a year earlier. Management put the decline down to lower Quest headset sales, partly offset by strong growth in AI glasses.
Reality Labs still loses billions, though management expects its losses to fall in 2026 from 2025, to between $18 billion and $19 billion.
Muse is expensive to run, although management has shared no specific numbers on its costs. Management said it needs a great deal of computing power and expects total serving costs to rise, while its near-term priority is to grow adoption.
Across the whole company, Meta spent more than its operations brought in during fiscal Q3 2026. Cash from operations rose to $32.8 billion, up from $30.0 billion a year earlier. After spending on servers, data centers and network infrastructure, however, free cash flow was negative $1.16 billion, against $11.2 billion a year earlier.
Is Meta’s New Direction Reassuring For Shareholders?
Partly. On the older bet, management expects the Reality Labs operating loss to come down to about $15 billion in 2027 and to trend toward profitability after that. For a shareholder who worried about how much the metaverse cost, that is the reassuring part.
Muse is the open question. Management expects Muse’s cost efficiency to improve more than tenfold within a year, which it said will let Muse be profitable once its revenue lines are at scale. Meta plans to start charging with subscriptions, and said building that revenue will take time. Management also said Meta will likely work on charging for Muse a little sooner than it usually does with a new product, because of the size of both the cost and the opportunity.
Meta usually gives its full-year outlook on its fourth-quarter call, and that report is expected in January 2027. Meta’s spending outlook for 2027 is the figure to watch then.
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