• Meta Platforms (NasdaqGS:META) has launched public testing of Vibes, a standalone app focused on AI generated and AI remixed video content.
• The company is pairing the Vibes rollout with a shift toward AI exclusive content creation across its ecosystem.
• At the same time, Meta is restructuring its Reality Labs division, including large scale layoffs and the closure of three VR gaming studios.

Meta Platforms, trading at $661.46, is making a clear move to put AI at the center of its consumer products. The stock has seen very large gains over the past 3 years and a 146.2% return over 5 years, although the past year shows a 7.1% decline. In the shorter term, the shares are down 7.7% over the past week and up 2.0% over 30 days, which provides context for how the market is reacting as these changes roll out.

For you as an investor, Vibes and the Reality Labs restructuring highlight where management is directing resources and attention. The creation of an AI only video ecosystem and a slimmer VR gaming footprint could influence how users spend time on Meta platforms, how creators earn, and how Meta competes with other video apps.

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How Meta Platforms stacks up against its biggest competitors

Quick Assessment

• ✅ Price vs Analyst Target: At US$661.46, the share price sits about 23% below the US$859.85 analyst consensus target.
• ✅ Simply Wall St Valuation: Simply Wall St estimates the shares are trading 38.8% below fair value, flagging them as undervalued.
• ✅ Recent Momentum: The 30 day return of 2.0% suggests the price has been edging higher as the Vibes launch and Reality Labs changes progress.

Check out Simply Wall St’s
in depth valuation analysis for Meta Platforms.

Key Considerations

• 📊 The Vibes app and push into AI only content could influence engagement, ad formats and creator economics across Meta’s ecosystem.
• 📊 Keep an eye on Reality Labs spending, user uptake of AI video tools and how these moves affect Meta’s P/E of 27.7 compared to the Interactive Media and Services average of about 12.
• ⚠️ The restructuring of Reality Labs, including VR studio closures, points to execution risk if Meta has to keep reallocating capital between VR and AI initiatives.

Dig Deeper

For the full picture including more risks and rewards, check out the
complete Meta Platforms analysis.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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