Facing pressure from investors and navigating a shifting technological landscape, Meta Platforms is enacting a series of significant financial adjustments. The company announced plans to reduce investment in its metaverse division by as much as 30% while simultaneously initiating a new cash dividend, signaling a pivot toward shareholder returns and a renewed focus on artificial intelligence. These moves come amid scrutiny over Meta’s considerable AI investments and follow a recent period of stock decline, though shares rebounded more than 7% Thursday following the news. The restructuring reflects the intensifying competition among tech firms to establish dominance in the burgeoning AI sector.
Meta is taking significant steps to regain investor confidence following recent market challenges. The company announced a new cash dividend and plans to reduce the budget for its metaverse project, known as Meta, by as much as 30%, a strategic initiative launched four years ago that prompted a corporate rebranding from Facebook.
The moves spurred a more than 7% jump in Meta’s stock price Thursday, coming after a period of correction that saw the company’s shares decline 15% since the end of October and 20% from its annual high in mid-August. Investor concerns centered on valuations surrounding artificial intelligence and the substantial investment Meta is making in developing its AI infrastructure.
Meta’s board of directors approved a quarterly dividend of $0.525 per share, payable December 23. The amount is consistent with previous quarterly payouts, following a 5% increase announced in February. In the third quarter, Meta allocated $1.33 billion to dividend payments, a 5.3% increase, bringing the total disbursement for the first nine months of the year to $3.986 billion, up 5%.
Conversely, the company curtailed share repurchase programs by 62%, to $3.327 billion. Between January and September, Meta repurchased $26.248 billion in shares, a 13% decrease year-over-year.
The decision to scale back metaverse investments has been well-received by investors and analysts who have consistently questioned its profitability. Bloomberg Intelligence suggests that these cost reductions, combined with the potential use of Google’s tensor processing units instead of its own custom ASIC chips, could improve free cash flow by $10 billion to $12 billion. The firm estimates that reducing metaverse spending by up to 30% could lower operating expenses by $5 billion to $6 billion, with Meta also targeting a 10% reduction in other business areas.
Meta is undergoing a financial restructuring to support its significant investments in AI infrastructure. In early November, the company closed a $30 billion bond offering, marking the largest debt issuance by a company with an investment-grade rating in the U.S. since 2023. Prior to that, it secured a $27 billion financing agreement with Blue Owl Capital to fund the construction of Hyperion Data Center facilities in the U.S.
These financial maneuvers come as Meta increases its capital expenditure (capex) guidance for the year to a range of $70 billion to $72 billion, up from a previous forecast of $66 billion to $72 billion. The company indicated that dollar-based capex growth is expected to be significantly higher in 2026 than in 2025. The increased investment underscores the competitive pressure among tech giants to lead in the rapidly evolving AI landscape.
In the third quarter, Meta reported a net profit of $2.709 billion, an 83% decrease, falling short of market expectations. The decline was attributed to a $15.930 billion provision related to the implementation of the “One Big Beautiful Bill” legislation.
Meta is also navigating leadership changes in its AI division, with chief scientist Yann LeCun planning to leave the company. Additionally, the company may face a new antitrust investigation from the European Commission regarding the launch of AI-powered features in WhatsApp.
