Meta Inc. shares surged 10% on Wednesday, climbing to $619.72 following reports that the company is preparing to launch a cloud computing business aimed at selling AI computing power to external customers. According to Bloomberg News, the market responded positively to the news of Meta's strategic shift to monetize its artificial intelligence computing resources through cloud operations. This represents a significant reversal from the company's recent performance, with Meta's stock having struggled to regain momentum since hitting a record high of $796 in August 2025, resulting in a cumulative decline of 27% over the past 11 months. At 12:10 PM ET, Meta shares were up 10.02%, gaining $56.43 as investors welcomed the company's latest AI strategy and saw potential for generating returns from its massive infrastructure spending.
Meta is reportedly developing a comprehensive cloud business that would sell cloud access to its AI computing capacity and models, with plans still under development and subject to potential changes. As reported by Bloomberg News, the proposed service would allow developers to access AI models hosted on Meta's infrastructure, including Muse Spark, and pay for the computing power required to run them. The company is also considering selling raw AI computing capacity, similar to what AI-focused cloud providers, or "neoclouds," currently offer. This strategic initiative is part of Meta Compute, an internal project that oversees the company's rapidly expanding AI infrastructure. The service would be similar to Amazon Web Services' Bedrock platform, which allows developers to access AI models from different companies, positioning Meta to directly compete with established cloud providers including Amazon Web Services, Microsoft Azure and Google Cloud.
Meta's plan to sell excess AI computing capacity comes as the company has announced multi-billion-dollar partnerships with Nvidia, Advanced Micro Devices (AMD), and Broadcom for AI chips and related hardware while simultaneously investing heavily in large-scale data centres to support its AI ambitions. In its April earnings report, Meta raised its projected capital expenditure for the year by $10 billion, taking its expected spending to $125-145 billion. The company cited "expectations for higher component pricing" and "additional data center costs" as key factors driving the increased investment. Meta has also signed computing deals with companies including Alphabet's Google, CoreWeave and Oracle as it expands its AI infrastructure. The massive spending has raised investor concerns about how quickly the company can generate meaningful returns on these investments, though this initiative could help Meta generate revenue from computing capacity that is not being fully used, easing investor concerns over heavy AI spending.
The report has created significant market pressure on AI cloud providers that currently work with Meta. Shares of CoreWeave fell 10.8% and Nebius dropped 12.4% as investors worried Meta could rely less on their services while becoming a direct competitor. According to Gil Luria, managing director of D.A. Davidson to Reuters, "The impact of adding Meta's capacity to the market is more likely to be on neoclouds than the big hyperscalers. Those companies like CoreWeave and Nebius rely on Meta for their growth and Meta may not need them anymore." Luria noted that "This is very similar to the situation SpaceX has found itself in, which led it to sell compute capacity as well." The business could also reduce Meta's dependence on advertising by opening a new source of revenue through AI services for businesses, providing an alternative revenue stream beyond traditional advertising models.
Recent leadership developments have added to investor concerns, including the departure of Emily Dalton Smith, Head of Product for AI for Work and Threads in June 2026, raising questions about leadership continuity. Internal reports from June 2026 indicate low employee morale stemming from a workforce reduction of approximately 8,000 employees in May 2026 and subsequent expanded workloads related to AI model training. Additionally, Meta's Chief Financial Officer Susan J. Li executed an insider sale of shares totaling over $6.9 million on May 19, 2026, contributing to cautious market sentiment amid the company's aggressive AI investment strategy. Despite Wednesday's sharp rally, Meta shares remain significantly below their recent peak as investors continue to assess the company's aggressive AI spending strategy.
