Meta Platforms (META -1.73%) has been crushing it for investors in recent times. In the past three years, shares have soared 47% as of April 25. That gain is significantly better than the Nasdaq Composite Index's 11% rise during the same time.

This social media enterprise continues to post stellar financial results, indicating its dominance in the digital advertising market on a global scale. But shareholders might be surprised to learn that the business has posted a cumulative operating loss of $42 billion in the past 12 quarters in an under-the-radar segment you might not be familiar with.

Is this unstoppable "Magnificent Seven" stock still a buy?

Betting on a virtual world

Mark Zuckerberg, Meta's founder and CEO, reorganized the business a few years ago to focus more on his metaverse ambitions. Housed in the Reality Labs division, this business is working on augmented-reality and virtual-reality hardware -- like its Quest headsets and Ray-Ban smart glasses -- and software, like Horizon. The hope is to apply virtual interactions to work, fitness, and gaming uses, for example.

This segment is bleeding cash. I already mentioned the monster $42 billion operating loss registered in the past 12 quarters. During a three-year stretch, Reality Labs posted a total revenue of only $6.3 billion. That's a tiny fraction of the company's total sales base.

You might wonder why so much money is going toward this project if the returns aren't there. But the losses are set to continue. Management said on the first-quarter earnings call that Meta's capital expenditures will come in between $35 billion and $40 billion in 2024, up from prior guidance between $30 billion and $37 billion.

"Our other long-term initiative that we're continuing to make significant investments in is Reality Labs," chief financial officer Susan Li said on the quarterly earnings call.

At first, this looks like a complete waste of time, energy, and resources. But it's crucial to understand Zuckerberg's thinking. His ultimate goal is to create the next computing platform, which he believes is going to be the metaverse. Apple and Alphabet have controlled the market for mobile operating systems, and Meta has had to play by their rules. Before that, it was PCs.

If he is right, Meta could control the prominent computing platform. And this could result in much greater revenue potential down the line. Getting 1 billion users into the metaverse is the stated objective.

As hard as it is for shareholders to see the ongoing sizable operating losses, I think we have to give Zuckerberg the benefit of the doubt. He has built Meta into one of the most valuable and dominant enterprises in the world in two decades. So it's difficult to bet against him.

Still a dominant business

The good news for Meta shareholders is that this is still a financially sound company. The other part of the business is the thriving family of apps segment, consisting of Facebook, Instagram, WhatsApp, and Messenger. It counted 3.2 billion daily active users as of March 31, up 7% year over year.

The family of apps segment is incredibly profitable. It produced an impressive 49% operating margin on $36 billion of revenue in the first quarter. This gives Meta virtually unlimited financial resources to continue funding the Reality Labs segment.

In fact, the company still generated $12.5 billion of free cash flow in the first quarter, which helped support ongoing share buybacks and the new dividend. Meta now has a net cash position of about $40 billion.

The stock has pulled back a bit following its latest earnings announcement. It now trades at a forward price-to-earnings ratio of 22. Investors looking to own a company that not only has a proven business model, but that is also investing in innovations should buy Meta today.