Knock on for months meta platform (meta 4.80%) It wasn’t work. That became the bill. Management raised its 2026 capital spending outlook in April to a range of $125 billion to $145 billion, and the stock fell on the news. And heading into Wednesday, the stock was down nearly 15% year-to-date and well below its 52-week high of $796.25, even as the company reported accelerating growth.
Investors then learned what could happen behind the scenes of that spending. Bloomberg reported Wednesday that Meta is developing plans for a cloud business that would sell access to artificial intelligence (AI) computing power and models, putting the social media company in competition with corporate cloud arms. Amazon and microsoft. The stock rose 8.8% to $612.91.
That reaction makes sense. But does renting computing power actually change the return calculation for one of the largest capital investment programs in corporate history?
Image source: Getty Images.
What Meta is reportedly planning
The initiative is internally known as Meta Compute, and the company is discussing two approaches: giving developers access to AI models hosted on Meta’s infrastructure or selling the raw computing power, according to Bloomberg. The report said the plan is still under development and subject to change. And it’s worth emphasizing that Meta hasn’t announced anything.
However, this idea didn’t come out of nowhere. CEO Mark Zuckerberg said in May that selling excess computing capacity is “definitely on the table” if Meta ends up building out more data center capacity than it needs, according to the report.
Excessive construction is indeed a concern that is weighing heavily on stock prices. Meta’s 2026 spending plan (upped in April to $135 billion from $115 billion) translates to $72.2 billion in capital spending in 2025. In other words, spending could double this year.
And unlike Amazon and Microsoft, alphabetMeta does not have a cloud computing business that rents its infrastructure to external customers. All revenue from these data centers must come from Meta’s own products, primarily advertising. If a company builds more capacity than it needs for its apps or AI ambitions, it gets nothing out of the excess. The cloud business will change that equation, turning idle capacity into revenue and giving Meta a source of sales beyond the advertising market.
Your spending may already have paid off
What’s often overlooked in the discussion surrounding Meta’s spending is that its core business is accelerating, a sign that the company’s AI investments are already paying dividends. First quarter sales increased 33% year-over-year to $56.3 billion, an improvement over 24% growth in the fourth quarter of 2025 and 22% growth for the full year.
Additionally, the company is working to build superintelligence.
“We’re on track to bring personal superintelligence to billions of people,” Zuckerberg said during the company’s first-quarter earnings call.
These things do not make the reported cloud plans solid or even short-term. Building an enterprise cloud business requires a commitment to sales teams, support operations, and reliability, and while Meta will be starting almost from scratch, Amazon and Microsoft have spent nearly two decades building exactly that. And selling raw computing power tends to be less profitable than Meta’s advertising business. So even if the reported plans are commercialized, it could be years before revenue becomes an issue.
Today’s changes
(-4.80%) $-29.41
current price
$583.50
Key data points
Market capitalization
$1.5 trillion
daily range
$580.46 – $610.00
52 week range
$520.26 – $796.25
volume
1.1M
average volume
17.2M
gross profit
81.94%
dividend yield
0.36%
So far, the stock’s valuation doesn’t seem too dire. After Wednesday’s spike, Meta’s P/E ratio is around 21x, but that multiple likely still reflects market skepticism about overall spending rather than the company’s growth.
To me, this stock is a buy — and not just because of Wednesday’s report. An unconfirmed plan should not be someone’s investment theory. The better reason is a combination of accelerating core business and modest valuation. The reported cloud business is best thought of as a free option. Once this begins, the meta will gain a second avenue for AI infrastructure to benefit. Even if that doesn’t happen, today’s buyers will still own one of the fastest growing major tech companies on the market at an affordable price.
There is a risk. Spending could rise further, and advertising demand could change rapidly if the economy weakens. But among big tech AI investors, Meta currently offers an unusual combination of accelerated growth, decent multiples, and, if the report proves correct, a new way to pay for all those data centers.
