META Stock Drops Overnight After Best Day In 6 Months: Analysts See 'Margin Of Safety' From AI Cloud Computing Business

Meta plans to set up a cloud business and sell compute and AI to third-party customers, according to a Bloomberg report.

• Analysts said a cloud business would be a tailwind and improve the utilization of Meta’s record capital expenditure.
• If Meta goes ahead with the plans, the business would add “a margin of safety to medium-term EPS," Mizuho said.
• Stocktwits sentiment for META flipped to ‘bullish’ from ‘bearish’ on Wednesday.

Meta Platforms, Inc. shares fell 1% in overnight trading on Wednesday after rallying earlier in the regular session on reports that the social media giant is building a cloud computing business.

Bloomberg reported that Meta is developing plans for a cloud infrastructure business that will sell cloud computing capacity and AI models to third-party customers, potentially rivaling industry leaders like Amazon Web Services, Microsoft Azure, and Google Cloud. 

Meta CEO Mark Zuckerberg had discussed the possibility of entering the cloud business at the company’s annual shareholder meeting in May.

Still, investors and analysts took note, sensing that the cloud venture could come sooner rather than later. META stock closed 8.8% higher on Wednesday, its best performance in nearly six months, while shares of neocloud operators CoreWeave and Nebius plunged 14% and 17%, respectively. CRWV and NBIS rebounded in the overnight session.

Analysts React To Meta’s Potential Cloud Plans 

The decision provides Meta with a clearer and more immediate return on investment of about $141 billion of 2026 capital expenditure, helping ease concerns about its elevated investment level, BMO Capital analyst Brian Pitz said in an investor note, calling the potential cloud venture a clear tailwind for revenue and operating income. 

The cloud business is "strategic" to Meta's longer-term AI ambitions, Jefferies said, adding that it appears to mirror Amazon's AWS playbook of monetizing excess compute capacity to lift utilization, improve ROIC, and boost cash flow to fund more internal capital investments.

Mizuho said it does not believe cloud is a near-term business line and sees it "more as planning for all potential scenarios — including a Plan B." The research firm added that investors continue to struggle to see a credible path to monetizing AI investment at Meta, and as such, the development is “a positive, adding a margin of safety to medium-term EPS." 

Retail View On META

Meta stock had fallen 13% in the first six months of 2026 before Wednesday’s rally, leaving investors puzzled over the prolonged weakness and whether the trend could reverse in the near term.

On Wednesday, the retail sentiment for META on Stocktwits flipped to ‘bullish’ from ‘bearish,’ even as analysts debated the rally’s durability, given that the size and scope of the cloud business were unknown. “$META if you didn't sell, you will regret. Below $600 tomorrow,” a trader wrote.

However, in an ongoing Stocktwits poll, over 40% of some 1,300 respondents said they are buying META stock or adding to their position following the Bloomberg report.

META shares remain 7% lower year-to-date.

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