Massive Meta Platforms Layoffs Could Be Coming. Why Did META Stock Gain on the News?

According to a Reuters report, social media giant Meta Platforms (META) is planning to cut a significant portion of its workforce. The stock climbed on news of the company’s alleged plans to reduce its headcount by over 20%, suggesting Meta is trying to balance its planned high spending on artificial intelligence (AI).
Meta anticipates 2026 capital expenditures, including principal payments on finance leases, to range between $115 billion and $135 billion, roughly double its 2025 spending. This increase stems from heightened investments to bolster efforts at Meta Superintelligence Labs and the core business.
More News from Barchart
-
Following the Fed's Rate Decision, the S&P 500 and Dow Fall to New Closing Lows for 2026
-
Huge, Unusual Trading in Nvidia Put Options - Investors Bullish on NVDA
Although the report on job cuts is still speculative, it follows a trend of companies reducing headcount to invest heavily in AI. While high spending has concerned investors, it might indicate a broader shift in which “AI is increasingly driving productivity,” Jefferies’ analysts said in a note.
Amid this, we take a closer look at Meta Platforms…
About Meta Platforms Stock
Meta Platforms is one of the world's top tech giants, powering global connections through its core social and messaging apps, including Facebook, Instagram, WhatsApp, and Messenger. Its advanced ad system uses precise data targeting to link businesses with users on its platforms and beyond. The firm boasts a market capitalization of $1.58 trillion.
Heavy investments in AI infrastructure have affected Meta’s stock lately. Over the past 52 weeks, the stock has gained a modest 3.92%. However, over the past six months, it has dropped 22%, while it is down 8.1% year-to-date (YTD). The stock reached a 52-week high of $796.25 back in August 2025, but is down 24% from that level.
On a forward-adjusted basis, Meta’s price-to-earnings ratio of 20.93x is higher than the industry average of 12.83x.
Meta Q4 Revenue Surges on User Expansion
On Jan. 28, Meta reported its fourth-quarter results for fiscal 2025, which beat expectations, leading to a 10.4% intraday gain in its stock on Jan. 29. The company’s revenue increased 24% year-over-year (YOY) to $59.89 billion, surpassing the $58.59 billion that Wall Street analysts had expected.
Meta’s robust results were largely driven by greater engagement across its platforms. Daily Active People (DAP) over its family of apps was 3.58 billion on average for December 2025, indicating an increase of 7% YOY. Ad impressions for the fourth quarter increased by 18% YOY, while the average price per ad increased by 6% YOY. Overall, its family of apps recorded a revenue of $58.94 billion, up 25% from the prior-year period.