Meta Platforms, Inc. (NASDAQ:META) shares jumped 8.8% in early New York premarket trading on Thursday, reaching $612.91, following a Reuters report citing Bloomberg News that the company is planning to offer extra AI compute power through a new cloud business. The surge added approximately $127.6 billion to Meta's market capitalization, which now stands at roughly $1.572 trillion.
The price move represents a significant valuation shift, equating to about 6.4 times Meta's first-quarter capital expenditures and lease principal of $19.84 billion, and 10.3 times its first-quarter free cash flow of $12.39 billion. The gain also wiped out some of Meta's earlier losses for the year.
Market Context and Holiday Schedule
With U.S. markets closed on Friday, July 3, for the Independence Day observance, Thursday marks the last full trading session before the long weekend. The Nasdaq opens for its normal session at 9:30 a.m. EDT. The rally comes as investors reassess the value of Meta's extensive AI infrastructure investments.
Meta had already raised its 2026 capital expenditure forecast to between $125 billion and $145 billion, up from a previous range of $115 billion to $135 billion, citing component prices and future data center space requirements. The potential cloud business would allow Meta to monetize its excess AI compute capacity, effectively treating it as inventory.
Impact on Cloud Competitors
The news weighed heavily on so-called "neocloud" providers. CoreWeave Inc. (NASDAQ:CRWV) fell 13.9% to $85.69, while Nebius Group N.V. (NASDAQ:NBIS) dropped 17.0% to $229.18. In contrast, major hyperscalers like Amazon.com Inc. (NASDAQ:AMZN), Microsoft Corp. (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOGL) saw less pronounced moves.
Gil Luria, an analyst at D.A. Davidson, told Reuters that the impact was likely greater for neocloud companies than for the larger hyperscalers, noting that Meta "may not need them anymore." The market value Meta added in a single day is roughly 2.8 times CoreWeave's latest valuation of $45.2 billion.
Leadership Changes and Strategic Shift
Late Wednesday, Meta moved Alex Schultz, its chief marketing officer, into a newly created chief data officer role. Schultz will oversee AI analytics globally, while Denise Moreno steps up as the new marketing chief. In a LinkedIn post, Schultz described AI as driving "effectively unlimited demand for insights."
The cloud plan, still unconfirmed by Meta, represents a potential pivot toward monetizing its massive AI infrastructure. CEO Mark Zuckerberg said in May that cloud computing was "definitely on the table," noting that companies approach Meta "almost every week" requesting access to its AI models or extra compute power.
Financial Implications and Risks
While a compute rental unit could help Meta recoup some of its heavy AI spending, it also raises questions about whether the company has overbuilt capacity for its core platforms—Facebook, Instagram, WhatsApp, and AI features. Meta's first-quarter results showed costs and expenses jumped 35% year over year, with ad impressions up 19% and average ad price up 12%.
The key question for investors is whether Meta can sustain its price above $600 through the holiday break, given the lack of official details on timing, pricing, or revenue expectations for the reported cloud initiative. The move signals a broader market shift in how AI infrastructure is valued, with the buyer—Meta—now potentially becoming a supplier in the space.
