Meta Platforms Inc.’s Reality Labs division reported a $4 billion loss in the first quarter of 2026, intensifying financial pressure on its VR and AR initiatives.
The loss comes as Meta pivots from open-source AI to a more closed-source approach with its upcoming “Avocado” release. Chinese labs have been advancing open models at lower costs, challenging U.S. leadership. Despite the setback, Meta plans to maintain heavy capital expenditure on AI infrastructure.
Following the news, prediction market confidence that Meta’s stock will hit $740 this week dropped sharply-from 2% to 0.1% in 24 hours.