Meta surged 18% after Zuckerberg confirmed cloud plans, giving investors a clear monetization path for AI spending. With 91% analyst buy ratings and an $821 mean target, the stock has room to run.
Meta Platforms shares jumped nearly 18% from their June 30 close after CEO Mark Zuckerberg confirmed the company's plan to launch a cloud computing business. The pop matched a target Jim Cramer had floated weeks earlier: a $100-per-share gain on exactly such an announcement.
The rally broke a pattern of the stock shrugging off Meta's steady stream of AI product news, from cheaper smart glasses to a Qualcomm chip partnership, because none directly addressed the biggest overhang: how Meta would earn a return on its massive AI spending.
The cloud business provides that answer. Zuckerberg explained in a Bloomberg interview published Thursday that Meta receives high offers for renting out its compute capacity. "I don't know anyone in the industry who feels like they have too much compute," he said, pushing back on the idea that the company overbuilt infrastructure.
Meta also launched Muse Spark 1.1, an AI model for coding and agentic tasks that competes directly with Anthropic and OpenAI. The tool writes and debugs code, uses software, and understands text, images and video. It gives Meta a new reason for enterprises to buy in.
On the spending side, Meta expects $135 billion in capital expenditure at the midpoint of its guidance this fiscal year. Microsoft plans roughly $190 billion. Alphabet's 2026 capex projection is $180 billion to $190 billion, and Amazon has guided to $200 billion. All four face pressure to show that the spending delivers revenue. Alphabet issued $85 billion in new stock last month to offset its plans. Amazon sold $25 billion in bonds this week. Meta, with a cloud business just starting up, has less debt load but also less current revenue from its infrastructure.
Wall Street analysts are overwhelmingly bullish. 91% of covering analysts rate Meta a buy. The mean price target is about $821. The CNBC Investing Club holds a buy-equivalent rating with a $750 target.
Even after this week's rally, Meta shares are only slightly positive for the year and sit below the August 2025 record close of $790. The cloud pivot and the upgraded AI model give the stock a path to retest that level, assuming the monetization story holds.
AlphaScala's proprietary model assigns Meta an Alpha Score of 65 out of 100, a Moderate rating that reflects the improving revenue narrative.
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