Meta continues to sink money into the metaverse, anchored by virtual reality and augmented reality technologies.

The company reported third-quarter earnings on Wednesday and said that the Reality Labs division recorded an operating loss of $4.4 billion while generating $470 million in sales during the period.

Wall Street was expecting Reality Labs to post an operating loss of $5.1 billion on $316 million in revenue.

The Reality Labs unit is responsible for developing the company’s Quest-branded family of VR headsets and Ray-Ban and Oakley AI smart glasses that Meta develops in partnership with eyewear giant EssilorLuxottica.  

The company’s Reality Labs division has now recorded over $70 billion in cumulative losses since late 2020, underscoring the high costs of building VR, AR and other consumer hardware.

Meta CEO Mark Zuckerberg in September revealed the $799 Meta Ray-Ban Display glasses, which are the company’s first consumer-ready AI glasses that include a built-in display and an accompanying wristband with neural technology.

EssilorLuxottica said in its most recent earnings report earlier this month that those AI glasses helped lift its sales in the third quarter.

“Clearly there is a lift coming from Ray-Ban Meta wearables as a product category,” EssilorLuxottica CFO Stefano Grassi said during a third-quarter earnings call.

With Meta’s AI glasses becoming a surprise hit, investors have been monitoring for any signs that the company may be shifting its metaverse strategy.

Meta on Monday said that Vishal Shah, who was leading its metaverse initiatives, is now a vice president of AI products in the company’s Superintelligence Labs division that works on AI.

WATCH: Market volatility reflects AI trade anxiety ahead of Mag 7 earnings.

ServiceNow reported third-quarter results on Wednesday that blew past Wall Street’s estimates, with the company also approving a five-for-one stock split.

Shares rose 4% after the bell.

Here’s how the company did versus LSEG estimates.

• Earnings per share: $4.82 adjusted vs. $4.27 expected
• Revenue: $3.41 billion vs. $3.35 billion expected

Third-quarter subscription revenues, which account for the bulk of the enterprise software company’s sales, totalled $3.3 billion and surpassed a $3.26 billion estimate from StreetAccount. Overall revenues grew 22% from the year-ago period.

ServiceNow bumped up full-year guidance, saying it now expects subscription revenue to range between $12.84 billion and $12.85 billion for the year. Last quarter, the company raised FY guidance to a range of $12.78 billion to $12.80 billion.

Like many software companies, ServiceNow is benefitting from the artificial intelligence transformation that’s forcing more businesses to adopt the tools.

“Every enterprise in every industry is focused on AI as the innovation opportunity of our generation,” wrote CEO Bill McDermott in a release. He called the results the “clearest demonstration” that businesses are relying on ServiceNow for these capabilities.

Finance chief Gina Mastantuono told CNBC that the annual contract value for ServiceNow’s AI business is projected to surpass $500 million this year and on track toward the goal set at its investor day to reach $1 billion by 2026.

“The value AI is going to create in enterprise is like nothing that we’ve seen in a very, very long time,” she said. “We have real customers, it’s not just hype, and we have real values and we’re driving real outcomes for those customers.”

Net income hit $502 million, or $2.40 per share, up from $432 million, or $2.07 per share, during the same quarter in 2024. Current remaining performance obligations reached $11.35 billion.

ServiceNow said its fourth-quarter guidance accounts for ongoing U.S. government uncertainty and the recent shutdown. The company expects $3.42 billion to $3.43 billion in subscription revenues.

“Whenever the government reopens, the administration’s continued focus on cost efficiency and modernization aligns directly with our strengths,” she said, adding that ServiceNow’s U.S. federal business grew more than 30% in the third quarter.

ServiceNow’s board also approved a five-for-one stock split slated for the beginning of December. Mastantuono said the split will make shares accessible to more retail investors.

The stock is down about 13% year to date.

Federal Reserve Chair Jerome Powell said on Wednesday that the artificial intelligence boom is different from the dotcom bubble of the late 1990s.

“This is different in the sense that these companies, the companies that are so highly valued, actually have earnings and stuff like that,” Powell said, during a news conference following the Fed’s two-day policy meeting.

AI investments in data centers and chips are also a major source of economic growth, he said. In the dotcom era, numerous companies raced to big valuations before going bankrupt due to hefty losses.

Powell didn’t name specific vendors, but chipmaker Nvidia has emerged as the world’s most valuable company, surpassing $5 trillion in market cap. The rally has been driven by the company’s graphics processing units, which are at the heart of AI models and workloads.

However, while Nvidia is generating big profits, high-valued startups OpenAI and Anthropic have been burning cash as they develop and expand their services.

OpenAI has racked up $1 trillion in AI deals of late, despite being set to generate only $13 billion in annual revenue. Anthropic, which is at a $7 billion revenue run rate, last week announced an estimated $50 billion cloud partnership with Google.

WATCH: AI market differs from bubble