On Feb. 1, Meta Platforms (META 0.43%) reported its biggest and most profitable quarter in history. Its "family of apps" includes Facebook, Instagram, and WhatsApp. And this trio absolutely delivered for shareholders in the fourth quarter of 2023.

In Q4, Meta's revenue grew 25% year over year. This was its best growth rate in over a year, boosting its full-year revenue to a whopping $135 billion.

Meta Platforms' Facebook enjoyed user growth from around the world in Q4, finishing with 2.1 billion daily active users. Management was upbeat about the results for Instagram and WhatsApp as well. These apps primarily make money through advertising. And in Q4, ad impressions (the number of times an ad was displayed) were up a strong 21% year over year.

Meta Platforms is clearly a business that revolves around advertising on its various social platforms. And this division of the business is extremely profitable, generating operating income of nearly $63 billion in 2023.

However, Meta Platforms is betting the future of the company on something else entirely. And in 2023, this other division had an operating loss of more than $16 billion, worsening from its prior-year operating loss of almost $14 billion.

Meta Platforms' vision of the future

When it comes to Meta's long-term vision, co-founder and CEO Mark Zuckerberg doesn't intend to sit back and just let the advertising profits pour in. In the Q4 earnings call, Zuckerberg addressed the long-term vision by saying, "We have two major parts of our long-term vision, and in addition to AI the other part is the metaverse."

The metaverse is a fuzzy concept. But think of it as a digital world people experience through immersive hardware devices, such as virtual reality (VR) headsets. Inside the digital world, users can interact socially, have experiences, conduct commerce, and more.

Zuckerberg is all-in on the future of the metaverse, as evidenced by his decision to rebrand the entire company to Meta Platforms in 2021. It's also evidenced by how much money the company is investing in its Reality Labs business segment -- the part that involves its Metaverse vision.

In 2023, Meta's Reality Labs generated $1.9 billion in revenue (mostly hardware sales for its Quest headset device). But this segment racked up a $16.1 billion loss for the year.

Here's another stat that may shock investors: From 2019 through 2023 (five full years of results), Meta Platforms generated just $8 billion in revenue from Reality Labs. However, its operating loss from Reality Labs over this period is over $51 billion.

To put that number into perspective, consider that the S&P 500 is an index comprised of the largest, most profitable U.S. companies. Occidental Petroleum is currently the 165th-largest company in the index. Meta Platforms could have paid cash for this oil company with its metaverse losses alone.

Does it matter?

With a market capitalization of nearly $1.2 trillion as of this writing, $51 billion over five years isn't that big of a number for Meta Platforms, as strange as that might sound. Granted, ongoing losses for that division and lackluster growth (it generated more metaverse revenue in 2021 than in 2023) aren't ideal. But relative to the size of the overall business, Meta can afford this gamble.

The problem with being a trillion-dollar company is that it will be hard for Meta Platforms to find market-beating growth. Simply put, it needs ginormous ideas, and the metaverse is a big enough possibility that it may be worth pursuing. Many third-party research reports project that the metaverse will be worth hundreds of billions of dollars by 2030.

Moreover, the technology for making the metaverse possible is improving all the time. Besides Meta's Quest headsets, Apple just launched its Vision Pro, which is being celebrated by the media -- award-winning filmmaker James Cameron praised the Vision Pro to the point of calling it a "religious" experience.

Even Disney is getting in on the action by unveiling its HoloTile device -- a floor mat that allows VR users to walk around the digital space while staying in one place in the physical space.

The point is that metaverse technology is clearly improving. Meta Platforms' investments haven't paid off yet. But perhaps traction will come as the user experience improves.

Even if it doesn't pay off, I'm not sure investors should be too hard on Meta Platforms here. Given the strength of its core business, it can afford to make a big long-term bet on the future. But one thing's for sure: If it's going to enjoy long-term market-beating growth from here, it needs a big bet to pay off.