Meta shares rise 6% in premarket trading as Reality Labs gets the budget axe

Meta Platforms saw its stock jump roughly 6.3% in premarket trading, a move fueled by reports that the company is preparing to cut Reality Labs spending by as much as 30%. The metaverse dream isn’t dead, but it’s clearly being asked to take a smaller seat at the table.

The beneficiary of those freed-up dollars: artificial intelligence. Meta has been on a capital expenditure tear in 2026, with guidance now set at $125B to $145B for the year. That’s up from an earlier range of $115B to $135B.

Reality Labs takes a haircut

A potential 30% budget reduction signals that Meta is redirecting resources toward AI, where the competitive landscape demands massive infrastructure investment right now.

The irony is hard to miss. Meta literally renamed itself after the metaverse concept in 2021. Now the company is quietly de-emphasizing the very division that inspired its corporate identity.

The AI spending arms race

Meta’s capex guidance of $125B to $145B puts it squarely in the upper tier of AI infrastructure spenders globally.

But there’s a tension here. An earlier 2026 report about a potential multi-billion dollar equity raise for AI funding caused Meta’s stock to drop more than 6% in intraday trading. Investors interpreted a possible share dilution as a negative signal.

The current premarket rally suggests that cutting costs in one division to fund AI spending is received far more favorably than raising new capital to do the same thing.

New revenue streams and subscription plays

Meta launched Meta One subscriptions in May 2026, introducing premium tiers across its platforms. Facebook and Instagram subscriptions are priced at $3.99 per month, while WhatsApp’s premium tier costs $2.99 per month.

The subscription launch contributed to a modest stock gain of around 3.7% to 4% at the time.

What this means for investors

The sheer scale of Meta’s AI spending remains a risk. Even with Reality Labs cuts offsetting some costs, $125B to $145B in annual capital expenditures is an enormous commitment.

For crypto-adjacent investors, Meta’s massive investment in AI infrastructure could have indirect effects on energy and compute markets that overlap with crypto mining operations. More demand for data center capacity and GPU resources from companies like Meta can drive up costs for miners who rely on the same hardware and electricity supply chains. Meta’s earlier ventures into digital currencies, most notably the ill-fated Libra/Diem project, remain dormant.

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