If Meta Pushes Into Cloud Computing, Should Investors Care?
Key Points
Meta's stock has fallen nearly 15% in the past 12 months.
The social media giant would join other large tech companies, such as SpaceX, in selling excess compute power.
Mark Zuckerberg's company could spend up to $145 billion in AI infrastructure this year.
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Meta Platforms (NASDAQ: META) could spend as much as $145 billion on AI in 2026 alone. That is a staggering amount of money, and Wall Street has grown increasingly nervous that the spending spree will yield enough returns to keep shareholders happy. Meta now appears to be looking to sell its excess computing power, much like competitors Amazon and Space Exploration Technologies (SpaceX).
Should investors care about this particular move? Let's have a look at what it could potentially mean for shareholders.
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This plan enables Meta to create another revenue stream that partially offsets the incredible cost of the AI build-out. This should ease at least some of the investors' concerns. Meta's stock has been sluggish over the past year. It's down more than 15% in the past 12 months and 7% in 2026, as of this writing.
Other large tech companies have been doing this for years, so Meta will need to compete in a well-established market filled with entrenched competitors.
Image source: The Motley Fool.
Should investors care about this? Yes, and they should be cautiously optimistic. This is a good move by Meta, but it's not a slam dunk. It could offset AI costs, but it might not become a profit center anytime soon. The bearish view of this move is that Meta is realizing AI capital expenditures have gone too far, and this is one way to begin recouping from an overly expensive endeavor.
If Meta can successfully sell its excess compute power and create another strong revenue engine, now could be a good time for investors to buy in and benefit from the move. Because Meta has struggled in the past year, its valuation metrics are currently attractive. The company is trading with a forward P/E ratio of less than 20.
Still, I'm not convinced this isn't just a way to reverse course on an overly ambitious spending spree.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Meta Platforms. The Motley Fool has a disclosure policy.
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