Meta is reportedly developing a cloud business that would sell access to AI computing power and models, pitting it against the cloud units of Amazon and Microsoft. The report gives investors a possible payoff for a capital spending program that could double this year, and Meta shares jumped in response.
Meta shares jumped 8.8% to $612.91 after Bloomberg reported Wednesday that the company is developing a cloud business to sell access to artificial intelligence computing power and models. That plan would put the social media company in competition with the cloud units of Amazon and Microsoft.
The move addresses the market's biggest worry about the stock: the bill. When management raised its 2026 capital expenditures guidance in April to a range of $125 billion to $145 billion, shares sank. Heading into Wednesday, the stock had fallen nearly 15% for the year, well below its 52-week high of $796.25.
What Meta is reportedly planning
The effort is internally called Meta Compute, and the company is weighing two approaches: giving developers access to AI models hosted on its infrastructure, or selling raw computing power. The report said the plans are still in development and could change, and Meta has not announced anything.
The idea is not new, however. According to the report, CEO Mark Zuckerberg said in May that selling excess computing capacity was "definitely on the table" if the company builds more data center capacity than it needs.
Overbuilding is exactly the fear weighing on the stock. Meta's 2026 spending plan compares to $72.2 billion in capital expenditures in 2025, meaning spending could double this year. Unlike Amazon, Microsoft, and Alphabet, Meta currently has no cloud business renting its infrastructure to outside customers, so every dollar of return on those data centers has to come from its own products. A cloud business would turn idle capacity into revenue.
The spending may already be paying off
The core business is accelerating, a sign the AI investments are already generating returns. First-quarter revenue rose 33% year over year to $56.3 billion, a step up from 24% growth in the fourth quarter of 2025.
Building an enterprise cloud business still requires sales teams, support operations, and reliability commitments that Meta would be starting mostly from scratch, while Amazon and Microsoft have spent nearly two decades building exactly that. Selling raw computing power also tends to carry lower margins than advertising, so even if the plans become a product, it could take years for the revenue to matter. After Wednesday's jump, Meta trades at about 21 times earnings, a valuation the author argues still reflects the market's skepticism about all that spending rather than the company's growth.
Source: The Motley Fool
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