Meta Platforms Inc. (NASDAQ:META) shares are on watch Thursday following recent news that the company will lay off staff in its Reality Labs division.
Meta’s Strategic Shift Amid Layoffs
Meta is cutting roughly 1,000 jobs, about 10% of the approximately 15,000‑person group, with employees starting to receive notices on Tuesday, according to an internal message from CTO Andrew Bosworth. The move is part of Meta’s broader shift away from heavy spending on virtual reality and metaverse projects and toward AI‑powered wearables and mobile features, reported Bloomberg.
The company is refocusing its metaverse strategy around mobile devices and scaling back VR investments to make the division “more sustainable.”
Reality Labs has racked up more than $70 billion in losses since early 2021, as many of its big bets haven’t yet produced meaningful revenue. Executives had already floated potential budget cuts of up to 30% late last year to redirect more resources into areas like AI glasses.
Meta also seems to be moving in tandem with the broader market, which is experiencing positive momentum. The S&P 500 is up 0.61%, while the Technology sector is leading with a gain of 1.40%, suggesting a favorable environment for tech stocks.
The Bearish Indicators To Watch For
Even with the market boost Thursday, the company is currently positioned below its key moving averages, indicating a bearish sentiment among traders. With the stock trading 4.7% below its 20-day SMA and 9.6% below its 100-day SMA, it suggests that upward momentum is lacking.
The RSI sits at 32.49, which is neutral but leans towards oversold territory. This level indicates that while the stock isn’t currently overbought, it could be approaching a point where a rebound might occur if buying interest picks up. MACD is below its signal line, indicating bearish pressure in the near term, suggesting that traders should be cautious, as the momentum is not favoring upward price action at this moment.
Key support is at $581.50, while resistance is around $673.50. If Meta Platforms, Inc. Class A Common Stock tests the support level, it could signal a potential reversal or further decline, while a breach of resistance might indicate a trend change.
In December, the death cross occurred when the 50-day SMA crossed below the 200-day SMA, which is a critical bearish signal. This crossover often suggests a longer-term downtrend, so traders should be mindful of this development.
Looking at the 12-month performance, Meta Platforms, Inc. Class A Common Stock has gained just 1.02%. This modest return reflects a lack of strong bullish trends over the past year, reinforcing the current bearish sentiment.
Currently, the stock is positioned at 45.4% of its 52-week range, indicating it is closer to the lower end of that range. This positioning suggests that there may be more room for downside if selling pressure continues.
META Price Action: Meta shares were up 1.26% at $623.29 at the time of publication on Thursday, according to Benzinga Pro.
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