Citi Maintains Buy on Meta Platforms (META), Sees Potential Benefits from Cost Restructuring

Meta Platforms Inc. (NASDAQ:META) is among the best stocks you’ll privation you bought sooner.

On December 4, Citi reiterated its Buy standing and maintained an $850 terms people connected Meta Platforms Inc. (NASDAQ:META). This reaffirmation followed a Bloomberg study that said the institution is readying fund cuts of arsenic overmuch arsenic 30% for its Metaverse division.

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However, the analysts astatine the concern slope presumption this imaginable restructuring arsenic a strategical realignment alternatively than a antagonistic improvement similar a retrenchment. They noted that it would escaped up superior and endowment to accelerate Meta’s Super Intelligence Labs and next-generation AI initiatives arsenic caller products attack motorboat successful FY2026.

Meta’s allocation of resources betwixt halfway Reality & Research (R&R) efforts and emerging artificial quality opportunities has been a hotly debated taxable recently. Citi, however, believes that the determination is simply a confirmation that Meta is sharpening its concern absorption toward higher-return avenues to thrust incremental growth.

According to the Bloomberg report, astir of the reductions volition beryllium successful Meta’s virtual world radical and Horizon Worlds. Meta Platforms Inc. (NASDAQ:META) is expected to divert the savings toward futuristic projects specified arsenic AI glasses and different wearables. Elaborating connected that, the institution spokesperson said successful a statement:

“Within our wide Reality Labs portfolio, we are shifting immoderate of our concern from Metaverse toward AI glasses and wearables, fixed the momentum there. We aren’t readying immoderate broader changes than that.”

While layoffs volition astir apt beryllium portion of the reductions, a last determination connected the cuts is yet to beryllium made, according to radical acquainted with the developments, the Bloomberg study said.

Meta Platforms Inc. (NASDAQ:META) operates large societal media services, including Facebook, Instagram, WhatsApp, Messenger, and Threads, arsenic good arsenic virtual world products specified arsenic Oculus headsets.

While we admit the imaginable of META arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you’re looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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Disclosure: None. This nonfiction is primitively published astatine Insider Monkey.