Meta's Reality Labs loses $4B in Q1 2026, total losses reach $83.5B since 2021

Meta's Reality Labs division lost $4 billion in the first quarter of 2026, continuing a pattern of average quarterly losses of $4 billion over the past 21 quarters. Since 2021, total losses have reached $83.5 billion. Despite Meta's strong financial performance—net income of $26.8 billion (up 61% year-over-year) and revenue of $56.3 billion (up 33%)—the company is shifting focus from metaverse to AI. Meta projects capital expenditures of $125–145 billion in 2026, exceeding analyst expectations. CEO Mark Zuckerberg cited higher component costs, particularly memory pricing. Meta has poached over 50 AI researchers from competitors and recently shipped its AI model Muse Spark. CFO Susan Li acknowledged the company has consistently underestimated compute needs. Meta's stock fell over 5% in after-hours trading.