Zuckerberg: Meta May Enter Cloud Computing Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Newsfilter
- Cloud Computing Potential: CEO Mark Zuckerberg stated at the shareholders meeting that entering the cloud computing market is on the table if Meta overspends on data centers and has excess capacity, potentially positioning Meta to compete with Amazon and Microsoft, thus expanding its business scope.
- Increased AI Investment: Meta raised its 2026 guidance for AI-related capital expenditures to between $125 billion and $145 billion, up from a prior range of $115 billion to $135 billion; despite better-than-expected Q1 earnings, shares fell 7%, indicating market concerns over high spending.
- Resource Rental Possibility: Zuckerberg mentioned that while Meta hasn't rented out computing resources yet, it remains an option if the company feels overbuilt, showcasing the company's flexibility and confidence in future resource utilization.
- AI Subscription Service Testing: Meta announced it will begin testing monthly subscription services for its Meta AI app and website, priced at $7.99 or $19.99 per month, marking the company's first charge to users and aiming to establish a long-term monetization model.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 635.290
Low
655.15
Averages
824.71
High
1117
Current: 635.290
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Meta Considers Launching Cloud Computing Business
- Cloud Business Potential: CEO Mark Zuckerberg indicated that Meta is considering launching a cloud computing service, with external companies already expressing interest, highlighting strong market demand despite current compute capacity being primarily for internal use.
- Competitive Market Advantage: As one of the four major hyperscalers in the cloud computing sector, a successful launch would position Meta to compete effectively against Amazon, Microsoft, and Alphabet in a rapidly growing market.
- Financial Growth Opportunity: Although Meta plans to spend over $100 billion on capital expenditures this year, its revenue is almost entirely from advertising; launching a cloud service could diversify its revenue streams and enhance long-term profitability.
- Investor Confidence Boost: With a current price-to-earnings ratio of 23 and a reported 33% revenue growth in Q1, the introduction of a cloud computing business could significantly elevate stock prices and attract more investor interest in its growth potential.
See More
Meta Considers Launching Cloud Computing Services
- Cloud Service Potential: At the shareholders meeting, Zuckerberg indicated that Meta is considering launching its own cloud computing services, and although not yet implemented, the interest from external companies highlights the market demand for its cloud capabilities.
- Capital Expenditure Plans: Meta plans to invest over $100 billion in capital expenditures in 2023, and while it lacks a cloud computing business, its substantial computing capacity lays the groundwork for future cloud services that could drive profit growth.
- Strong Market Demand: With the surge in demand for cloud computing, if Meta can launch its cloud services in a timely manner, it will help diversify its revenue streams, especially as its advertising revenue growth slows, with cloud computing's high margins providing a new growth avenue.
- Stock Price Upside: Currently, Meta's price-to-earnings ratio stands at just 23, lower than its big tech peers, and if it successfully launches a cloud computing business, it is expected to significantly enhance profitability, thereby driving stock price appreciation.
See More
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- Meta's AI Investments: Meta is pursuing several AI projects, including the development of a superintelligence platform and smart glasses; although its pivot to a metaverse company has not materialized as planned, these investments could drive future growth, especially as its advertising platform saw a 33% year-over-year revenue increase in Q1, indicating successful AI implementation.
- Microsoft's AI Business Growth: In its latest fiscal quarter, Microsoft reported an 18% revenue increase, with its AI business achieving an annual run rate of $37 billion, up 123% year-over-year, while its Azure cloud computing unit also grew by 40%, suggesting strong growth potential amid rising AI demand.
- Investment Opportunity in Low Valuations: Despite being undervalued in the current market, Meta's price-to-earnings ratio is at a three-year low, and Microsoft's price-to-operating-cash-flow ratio indicates its stock is attractively priced, presenting a compelling investment opportunity for investors.
- Market Concerns Over AI Valuations: While there are concerns about excessively high valuations in the AI sector, the low valuations of Meta and Microsoft, combined with their strong growth prospects, present a stark contrast, suggesting that investors should pay attention to these potential investment opportunities as AI technology continues to evolve.
See More
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- Lease Agreement Details: SpaceX's deal with AI startup Anthropic involves a $1.25 billion monthly lease until May 2029, but Musk's claim of a 180-day lease raises concerns about financial transparency, potentially confusing investors ahead of the IPO.
- Financial Disclosure Issues: The IPO filing lacks critical financial metrics such as subscriber churn and unit economics, leading analysts to caution that these omissions could hinder investors' ability to accurately value the company, especially given its valuation exceeding $1 trillion.
- AI Business Challenges: SpaceX's AI division reported a $2.5 billion operating loss in Q1, and while Musk aims to monetize compute capacity through the Anthropic deal, the company has yet to capitalize on its costly infrastructure, indicating insufficient market demand.
- Surging Capital Expenditures: SpaceX's capital expenditures reached $10.1 billion in Q1 2023, more than doubling year-over-year, with $7.7 billion tied to xAI, raising investor concerns about the company's financial health amid significant losses.
See More
Meta and Microsoft: Undervalued AI Investment Opportunities
- Meta's AI Potential: Meta is investing in several AI projects, including a plan to deliver a superintelligence platform to the masses; despite its unsuccessful pivot to a metaverse company, its use of AI in social media advertising has resulted in a 33% year-over-year revenue growth, indicating strong business growth potential.
- Microsoft's AI Business Growth: Although Microsoft's stock has dropped over 10% in 2026, its latest fiscal quarter saw an 18% revenue increase, with AI business annual run rate rising 123% year-over-year to $37 billion, demonstrating robust growth in cloud computing and AI demand.
- Undervalued Investment Opportunities: Both Meta and Microsoft's stocks are trading at relatively low valuations, with Meta's P/E ratio and Microsoft's cash flow ratio at their lowest points in the past three years, indicating that the market has not fully recognized their potential growth.
- Strategic Significance of Future Growth: As AI technology continues to evolve, Meta's AI smartglasses and Microsoft's Azure cloud services are expected to deliver substantial returns for investors, especially when market sentiment shifts, leading to potential stock price rebounds.
See More
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- Unprecedented Investment: According to Zacks Investment Research senior stock strategist Andrew Rocco, the current investment in the AI sector, particularly in memory chips, has reached unprecedented levels, with companies spending trillions, reflecting strong market demand and confidence in future growth.
- Historical Comparison: Rocco compares the current investment surge to historical events such as the railroad buildout and World War II military expansion, emphasizing that the scale of spending has a significant impact on GDP, indicating that tech companies are actively positioning themselves for future competition.
- Market Drivers: As major tech companies like Nvidia ramp up their investments in AI, the demand for data centers is also increasing, which not only boosts the stock prices of related firms but also fosters technological advancements and market expansion across the industry.
- Intensified Competitive Pressure: Rocco notes that tech companies are investing in AI not just for short-term returns but to maintain a competitive edge, with firms willing to take risks and increase spending rather than fall behind in this technological race.
See More
Meta Considers Launching Cloud Computing Business
- Cloud Business Potential: CEO Mark Zuckerberg indicated that Meta is considering launching a cloud computing service, with external companies already expressing interest, highlighting strong market demand despite current compute capacity being primarily for internal use.
- Competitive Market Advantage: As one of the four major hyperscalers in the cloud computing sector, a successful launch would position Meta to compete effectively against Amazon, Microsoft, and Alphabet in a rapidly growing market.
- Financial Growth Opportunity: Although Meta plans to spend over $100 billion on capital expenditures this year, its revenue is almost entirely from advertising; launching a cloud service could diversify its revenue streams and enhance long-term profitability.
- Investor Confidence Boost: With a current price-to-earnings ratio of 23 and a reported 33% revenue growth in Q1, the introduction of a cloud computing business could significantly elevate stock prices and attract more investor interest in its growth potential.
See More
Meta Considers Launching Cloud Computing Services
- Cloud Service Potential: At the shareholders meeting, Zuckerberg indicated that Meta is considering launching its own cloud computing services, and although not yet implemented, the interest from external companies highlights the market demand for its cloud capabilities.
- Capital Expenditure Plans: Meta plans to invest over $100 billion in capital expenditures in 2023, and while it lacks a cloud computing business, its substantial computing capacity lays the groundwork for future cloud services that could drive profit growth.
- Strong Market Demand: With the surge in demand for cloud computing, if Meta can launch its cloud services in a timely manner, it will help diversify its revenue streams, especially as its advertising revenue growth slows, with cloud computing's high margins providing a new growth avenue.
- Stock Price Upside: Currently, Meta's price-to-earnings ratio stands at just 23, lower than its big tech peers, and if it successfully launches a cloud computing business, it is expected to significantly enhance profitability, thereby driving stock price appreciation.
See More
Meta and Microsoft: Low Valuations with Growth Potential
- Meta's AI Investments: Meta is pursuing several AI projects, including the development of a superintelligence platform and smart glasses; although its pivot to a metaverse company has not materialized as planned, these investments could drive future growth, especially as its advertising platform saw a 33% year-over-year revenue increase in Q1, indicating successful AI implementation.
- Microsoft's AI Business Growth: In its latest fiscal quarter, Microsoft reported an 18% revenue increase, with its AI business achieving an annual run rate of $37 billion, up 123% year-over-year, while its Azure cloud computing unit also grew by 40%, suggesting strong growth potential amid rising AI demand.
- Investment Opportunity in Low Valuations: Despite being undervalued in the current market, Meta's price-to-earnings ratio is at a three-year low, and Microsoft's price-to-operating-cash-flow ratio indicates its stock is attractively priced, presenting a compelling investment opportunity for investors.
- Market Concerns Over AI Valuations: While there are concerns about excessively high valuations in the AI sector, the low valuations of Meta and Microsoft, combined with their strong growth prospects, present a stark contrast, suggesting that investors should pay attention to these potential investment opportunities as AI technology continues to evolve.
See More
Musk Sparks Confusion Ahead of SpaceX IPO
- Lease Agreement Details: SpaceX's deal with AI startup Anthropic involves a $1.25 billion monthly lease until May 2029, but Musk's claim of a 180-day lease raises concerns about financial transparency, potentially confusing investors ahead of the IPO.
- Financial Disclosure Issues: The IPO filing lacks critical financial metrics such as subscriber churn and unit economics, leading analysts to caution that these omissions could hinder investors' ability to accurately value the company, especially given its valuation exceeding $1 trillion.
- AI Business Challenges: SpaceX's AI division reported a $2.5 billion operating loss in Q1, and while Musk aims to monetize compute capacity through the Anthropic deal, the company has yet to capitalize on its costly infrastructure, indicating insufficient market demand.
- Surging Capital Expenditures: SpaceX's capital expenditures reached $10.1 billion in Q1 2023, more than doubling year-over-year, with $7.7 billion tied to xAI, raising investor concerns about the company's financial health amid significant losses.
See More
Meta and Microsoft: Undervalued AI Investment Opportunities
- Meta's AI Potential: Meta is investing in several AI projects, including a plan to deliver a superintelligence platform to the masses; despite its unsuccessful pivot to a metaverse company, its use of AI in social media advertising has resulted in a 33% year-over-year revenue growth, indicating strong business growth potential.
- Microsoft's AI Business Growth: Although Microsoft's stock has dropped over 10% in 2026, its latest fiscal quarter saw an 18% revenue increase, with AI business annual run rate rising 123% year-over-year to $37 billion, demonstrating robust growth in cloud computing and AI demand.
- Undervalued Investment Opportunities: Both Meta and Microsoft's stocks are trading at relatively low valuations, with Meta's P/E ratio and Microsoft's cash flow ratio at their lowest points in the past three years, indicating that the market has not fully recognized their potential growth.
- Strategic Significance of Future Growth: As AI technology continues to evolve, Meta's AI smartglasses and Microsoft's Azure cloud services are expected to deliver substantial returns for investors, especially when market sentiment shifts, leading to potential stock price rebounds.
See More
Surge in AI Investment Amid Memory Chip Shortages
- Unprecedented Investment: According to Zacks Investment Research senior stock strategist Andrew Rocco, the current investment in the AI sector, particularly in memory chips, has reached unprecedented levels, with companies spending trillions, reflecting strong market demand and confidence in future growth.
- Historical Comparison: Rocco compares the current investment surge to historical events such as the railroad buildout and World War II military expansion, emphasizing that the scale of spending has a significant impact on GDP, indicating that tech companies are actively positioning themselves for future competition.
- Market Drivers: As major tech companies like Nvidia ramp up their investments in AI, the demand for data centers is also increasing, which not only boosts the stock prices of related firms but also fosters technological advancements and market expansion across the industry.
- Intensified Competitive Pressure: Rocco notes that tech companies are investing in AI not just for short-term returns but to maintain a competitive edge, with firms willing to take risks and increase spending rather than fall behind in this technological race.
See More
