Key Points

Reports indicate Meta is creating a cloud unit to offer AI computing resources and models to external users.
Leadership projects 2026 capital spending between $125 billion and $145 billion, compared to $72.2 billion in 2025.
Meta posted first-quarter revenue growth of 33% from the prior year, up from 24% expansion in the final quarter of 2025.
10 stocks we like better than Meta Platforms

For months, criticism of Meta Platforms has focused less on its operations and more on its heavy investments. When executives increased the 2026 capital expenditures outlook in April to a range of $125 billion to $145 billion, the share price declined. Heading into Wednesday, the stock had fallen nearly 15% year to date and remained below its 52-week peak of $796.25, despite the firm delivering faster growth.

Investors then received insight into a potential benefit from that outlay. Reports emerged that Meta is preparing a cloud offering to provide artificial intelligence computing capacity and models, placing the company in direct competition with the cloud divisions of Amazon and Microsoft. Shares rose 8.8% to $612.91.

The market response is understandable. Yet the question remains whether leasing out processing power can meaningfully improve returns on one of the largest capital programs in business history.

What Meta is reportedly planning

According to the information, the project carries the internal name Meta Compute. The company is weighing two paths: allowing developers to use AI models running on Meta infrastructure or offering raw processing capacity. The plans remain under discussion and could shift. It is important to note that Meta has made no formal announcement.

Still, the concept builds on prior comments. CEO Mark Zuckerberg noted in May that offering surplus computing resources was under consideration if Meta constructs more data center capacity than required internally.

Overbuilding remains the central concern weighing on the shares. The updated 2026 spending range, increased in April from $115 billion to $135 billion, stands well above the $72.2 billion recorded in 2025. Spending could therefore double this year.

Unlike Amazon, Microsoft, and Alphabet, Meta currently lacks a cloud computing operation that leases infrastructure to third parties. All returns on these data centers must derive from Meta own products, primarily advertising. Excess capacity beyond internal needs would generate no income. A cloud service would alter this dynamic by converting unused resources into revenue and creating a sales channel outside advertising.

The spending may already be paying off

Amid the focus on spending levels, the core business shows signs of acceleration, suggesting AI investments are beginning to deliver results. First-quarter revenue climbed 33% year over year to $56.3 billion, exceeding the 24% growth seen in the fourth quarter of 2025 and the 22% rate for the full prior year.

The company is also advancing its superintelligence initiatives. Zuckerberg stated in the first-quarter earnings release that the firm remains on track to deliver personal superintelligence to billions of users.

None of this guarantees the reported cloud plans will succeed or launch soon. Establishing an enterprise cloud operation demands sales expertise, support structures, and service guarantees that Meta would need to build largely from the ground up, while competitors have spent nearly two decades developing these capabilities. Selling raw computing capacity also tends to produce lower margins than advertising. Even if the plans materialize, meaningful revenue could take years to develop.

In the interim, the stock valuation appears reasonable. Following the Wednesday gain, Meta trades at roughly 21 times earnings, a level that may still incorporate market doubts about the spending rather than the underlying growth trajectory.

The shares represent an attractive opportunity, though not primarily due to the recent report. An unconfirmed initiative should not form the basis of an investment case. The stronger rationale lies in the combination of accelerating operations and an undemanding valuation. The potential cloud business functions as an additional upside: if realized, it provides another avenue for the AI infrastructure to generate returns. If it does not proceed, current buyers still hold a fast-growing major technology company at a fair price.

Risks exist. Capital outlays could rise further, and advertising demand can weaken rapidly during economic slowdowns. Among large technology firms pursuing AI investments, however, Meta offers a distinctive mix of faster growth, a modest earnings multiple, and, should the reports hold true, an emerging method to earn returns on its data center investments.

Should you buy stock in Meta Platforms right now?

Before purchasing shares in Meta Platforms, review the following:

Analysts have identified what they view as the 10 strongest stocks for investors to consider at present, and Meta Platforms did not appear on that list. The 10 selections could deliver substantial gains over the coming years.

For context, when Netflix was added to a similar list on December 17, 2004, a $1,000 investment at that time would now be worth $418,761. When Nvidia was added on April 15, 2005, the same initial investment would now equal $1,195,804.

The overall average return from the service stands at 918%, significantly outpacing the 208% return of the S&P 500. Review the current top 10 list and join a community focused on individual investor perspectives.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.