Everyone Just Missed a Major Announcement From Meta Platforms

Meta Platforms (NASDAQ: META) just reported second-quarter results, and the market is quite disappointed. The stock tumbled the day after earnings, mainly due to weak bottom-line earnings and a smaller-than-expected revenue forecast for Q3. While those factors are important, most investors completely missed a huge announcement from Meta Platforms: an upcoming cloud computing business.

This launch has long been rumored, and it could be the very thing Meta's stock needs to pull it out of a major sell-off. Despite the disappointing quarter, I remain a Meta bull, as its AI offerings haven't even had a chance to take off quite yet.

Image source: The Motley Fool.

A cloud platform could ignite new growth in Meta's stock

Not having a cloud computing platform is the one thing that separates Meta from its AI hyperscaler peers. Alphabet, Amazon, and Microsoft all have cloud computing divisions. Each is an important part of their businesses and produces massive revenue and profits. Meta doesn't have that, as it has insisted that it is using all of its available computing capacity for internal AI model training and workloads. However, that could be changing.

CEO Mark Zuckerberg said on the earnings call: "We've built our API, we're rolling out business agents, we're getting a lot of offers for compute at a significant premium over what we paid for it, and we have more coding and productivity tools on our road map as well. We'll have more to share on all of this soon."

It's pretty clear that Meta is launching a cloud computing business soon, and its AI models will be at the core of this business. That's major news for investors, and gives Meta the monetization path for all of its AI spending that investors have been looking for. However, the market seemed to shrug off this announcement, distracted by slightly lower short-term guidance. I think that's a major mistake, and that Meta is primed for more upside over the next few years as its AI rolls out.

Still, investors shouldn't ignore how well Meta is doing right now. Its revenue is growing at a strong 28% pace, indicating that all of the work it's doing to integrate AI throughout its advertising business is paying off. While some investors may fixate on Meta's earnings per share falling, I think that's a poor metric to look at right now due to all of the spending that's going on to expand its AI resources.

Meta is preparing itself for an AI future, and that's going to take resources and time. Overall, I still think Meta is a great AI investment, and any sell-off due to short-term market sentiment is a great time to buy. With the market reacting negatively to Meta's latest earnings, I think now is the perfect time to scoop up shares.

Keithen Drury has positions in Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.