Meta Platforms, Inc. (NASDAQ: META) experienced a slight decline at the close of trading on Wednesday, as investors evaluated the company’s rapidly changing AI strategy, substantial cuts to its metaverse budget, and new regulatory pressures. The stock ended the day priced around $650 per share, representing a decrease of just over 1% from the previous day’s closing figure of $656.96, as reported by various market data sources. Following the market close, Meta’s stock remained relatively stable in after-hours trading, hovering around $650.13 without significant fluctuations.
1. Meta Stock Performance on December 10, 2025
On December 10, 2025, Meta’s stock closed at approximately $650.13, reflecting a decline of about 1.0% or $6–7 from Tuesday’s close. The intraday trading range fluctuated between $643 and $654, driven by reactions to AI-related news and broader macroeconomic developments. Over the past year, the stock has seen a trading range of approximately $480 to $796, placing the recent close in the upper half of that spectrum. Although Meta has been a standout performer among large-cap stocks in 2025, it has recently faced multiple consecutive down days, having fallen from above $670 last week. This shift seems to be a result of waning enthusiasm for metaverse budget cuts, coupled with increasing concerns regarding the company’s AI strategy and capital allocation.
In after-hours trading, Meta’s stock exhibited a calm demeanor, with moderate trading volumes and a price around $650.13, indicating that investors are absorbing the news rather than reacting with alarm as they prepare for Thursday’s market session.
2. The Main Narrative: Meta’s Shift Towards a Monetizable AI
The primary focus for Meta on this day was not its earnings but rather its evolving AI strategy. Reports indicate that the company is contemplating a shift from its previously open-source approach for its Llama project to a more closed, revenue-generating model. This strategic pivot aims to better capitalize on its significant AI investments. Initial market reactions reflected this shift, with shares dipping nearly 1% during early trading as investors evaluated the implications of moving away from open-source models.
Further commentary highlighted that Mark Zuckerberg is personally steering this change towards a monetizable AI framework, following months of assembling a costly and capable AI team. In addition, Meta is reportedly developing a new frontier AI model, codenamed “Avocado,” which is set to be a successor to Llama. However, the launch has been postponed from late 2025 to the first quarter of 2026 as the company recalibrates its AI strategy amid competitive pressures from rivals leveraging similar architectures. Collectively, these developments suggest that Meta’s strategy is transitioning from an open-source framework to a model that balances accessibility with the need for profitability, a tension that is likely to influence the company’s stock performance moving forward.
3. Metaverse Budget Reductions and VR Price Increases: Financial Prudence in Focus
This month, another significant development for Meta has been the drastic reassessment of its metaverse ambitions. Reports indicate that the company is preparing to implement substantial budget cuts of around 30% for its metaverse and Reality Labs divisions in the upcoming year. Reality Labs, which has accumulated losses estimated between $60 and $70 billion, has recently reported a quarterly loss of about $5 billion. Industry sources suggest that the forthcoming budget reductions will primarily impact the development of Horizon Worlds and Quest VR/AR projects. Earlier in the month, Meta’s shares surged by 4-6% in response to the announcement of these cuts and the redirection of resources towards AI and smart glasses, as investors welcomed the company’s efforts to align spending with market realities.
Additionally, Meta is reportedly planning to increase prices on certain VR devices to enhance the financial viability of its hardware unit. This price adjustment is viewed internally as a necessary measure to balance performance, development costs, and hardware margins. Though the market’s immediate reaction to this pricing news has been subdued, it aligns with the narrative of tightening budgets and emphasizes the need for profitability alongside growth.
4. Regulatory Challenges: Concerns over AI Outputs and EU Advertising Guidelines
Beyond strategic shifts and budgetary adjustments, Meta continues to face rigorous regulatory scrutiny, especially concerning its AI offerings. Recently, a bipartisan group of U.S. state attorneys general issued a letter expressing concerns that AI chatbots from major tech companies, including Meta, could be generating misleading outputs that may infringe upon state laws and negatively affect mental health. The letter cites instances where chatbots were allegedly involved in promoting harmful delusions and advocates for independent audits of AI products. This situation poses compliance and liability challenges for Meta as it seeks to integrate generative AI into its platforms like Facebook, Instagram, and WhatsApp.
In a separate development, Meta is set to introduce new advertising options for users in the EU, aiming to address regulatory demands by providing greater control over targeted advertising. While specific details are still emerging, the clear intention is to enhance user control over data and personalization while potentially impacting advertising efficiency in Europe. Investors should brace for ongoing regulatory challenges that could affect Meta’s AI and advertising strategies, even if they do not result in immediate stock movement.
5. Wall Street’s Perspective: Analyst Ratings and Price Projections for Meta
Despite the recent pullback, analysts maintain a generally optimistic outlook on Meta. Data indicates that the average 12-month price target for the stock is between $820 and $821 per share, suggesting a potential upside of approximately 25-27% from its current price around $650. The consensus rating is a “Strong Buy,” with most of the roughly 45 analysts covering the stock rating it as either a Buy or Strong Buy. Price projections range from a low of about $645, near the current price, to a high of $1,117. Recently, a Rosenblatt analyst reaffirmed a $1,117 target with a Strong Buy recommendation, while UBS set a bullish target of $915.
Long-term forecasts have also emerged, with some analysts suggesting that Meta could reach $1,000 by 2027, reflecting a gain of roughly 50-55% from current levels—an ambitious target but feasible given the stock’s past performance. Although these projections are speculative, they underscore a sustained bullish sentiment among market observers, particularly if Meta can effectively translate its AI investments into high-margin revenue streams.
6. Institutional Investment: Baird and Other Firms Increase Stakes
In terms of institutional investment, recent SEC filings indicate that Baird Financial Group has boosted its stake in Meta by approximately 9%, bringing its total holdings to around 1.53 million shares, valued at over $1.1 billion. Meta now constitutes about 2% of Baird’s portfolio, marking it as the seventh-largest holding. Other major institutions, including Vanguard, Norges Bank, Invesco, and Geode, have also either expanded or initiated their positions in Meta. Overall, institutional ownership of Meta is nearing 80%, solidifying the company’s status as a key holding among large investment portfolios. This robust institutional backing can help mitigate extreme declines in stock price, but it also means that Meta’s shares will be sensitive to shifts in institutional sentiment regarding AI expenditures, regulatory risks, or broader economic conditions.
7. Macro Environment: Fed Decisions, Interest Rates, and AI-Focused Tech
From a macroeconomic perspective, Meta’s trading activity is closely linked to a significant Federal Reserve decision and a busy week for tech companies tied to AI earnings. The Fed has recently confirmed a benchmark interest rate of 3.75%, down from 4.00%, signaling that a rate-cutting cycle may be in progress. Equity markets responded positively, with the Dow-linked US30 index rising about 1% and S&P 500 futures increasing approximately 0.7%. Lower interest rates generally favor long-duration growth stocks like Meta, which depend on substantial future cash flows. However, the Fed and market analysts have also cautioned about potential bubbles in AI-related capital spending, putting companies such as Meta, Oracle, and Nvidia under scrutiny.
This week is particularly pivotal as it marks a crucial period for AI earnings, with Oracle viewed as a key indicator of demand for AI infrastructure and cloud services. As Meta invests heavily in AI data centers and model training—reportedly around $70 billion in AI-related capital expenditures this year—any indication of disappointing AI returns from other firms could intensify scrutiny on its spending strategies.
8. Key Variables to Monitor Before December 11, 2025 Market Opening
As the market prepares to open on December 11, 2025, several Meta-specific and macroeconomic catalysts warrant close attention: the potential follow-up on the company’s shift toward a closed AI model; any clarifying statements from Meta regarding the future direction of Llama; updates on the development of the “Avocado” frontier AI model and its competitive stance against top-tier models from OpenAI and Google; market reactions to the significant budget cuts and price increases within the metaverse division; regulatory updates concerning AI outputs and advertising practices; and shifts in bond yields and technology sentiment in light of the Fed’s recent decisions. Analyzing these factors will be crucial for understanding the market dynamics surrounding Meta going forward.
9. Conclusion: Insights from After-Hours Trading
As we approach the December 11, 2025 market opening, the after-hours trading patterns for Meta indicate that there is no immediate crisis, with the stock maintaining a level around $650—roughly the midpoint of its trading range over the past few weeks, despite the surrounding noise. Investors appear to be grappling with how Meta plans to monetize its AI endeavors and how quickly recent budget cuts will translate into improved margins, rather than questioning the underlying health of the business. The risk-reward balance remains favorable, with Wall Street’s average price targets suggesting significant upside if Meta successfully executes its strategies, though the stock’s performance remains closely tied to regulatory developments and sentiment surrounding the AI sector. For traders and investors, distinguishing between noise and substantive signals will be key, as short-term movements may be influenced by AI-related headlines and earnings reports, while the long-term narrative hinges on Meta’s ability to convert its substantial AI and infrastructure investments into sustainable, high-margin revenues, all while navigating regulatory waters.
