Analysts are warning that Meta's new venture into cloud infrastructure could provide smaller margins than its lucrative ad business.
Shares of the company soared on Wednesday after the development, with CNBC's Jim Cramer confirming that the company will sell excess computing power to outside customers.
The sharp gain helped reverse part of Meta's disappointing performance this year. Before Wednesday's jump, the stock had fallen nearly 15% in 2026 as investors questioned whether Chief Executive Officer Mark Zuckerberg's massive AI spending spree would generate meaningful financial returns.
Bloomberg noted that the company is considering whether to offer access to its AI models in the infrastructure or sell raw computing power.
The reported strategy would put Meta in direct competition with established cloud giants such as Amazon Web Services, Microsoft Azure and Google Cloud, while also challenging specialized AI infrastructure providers including CoreWeave and Nebius.
Those concerns were immediately reflected in the market. Shares of CoreWeave and Nebius fell sharply after the report.
CNBC explained that the vast majority of the company's revenue comes from digital ads. CEO Mark Zuckerberg has been trying to change that, also announcing paid subscription plans for Instagram, Facebook and WhatsApp in May.
He had also said that month that launching a cloud business was "definitely on the table" if Meta eventually built more computing capacity than it needed internally.
Zuckerberg then revealed that companies had already approached Meta seeking access to its AI infrastructure and application programming interfaces, suggesting there is already demand for the company's computing resources. A commercial cloud offering could create a new recurring revenue stream while improving returns on expensive data center assets.
Paul Meeks, head of technology research at Freedom Capital Markets, told CNBC that the plan appears to be a "response to complaints that the company may be overspending and skepticism that Meta will ever earn a commensurate return on its capex."
"The problem with this company is that it only builds, or only thus far, capacity for itself, and it's not really monetizing any AI apps yet."
Wall Street has also scrutinized the company's capital spending as Meta aggressively expands its AI infrastructure. The company has projected between $125 billion and $145 billion in capital expenditures this year, one of the largest technology investment programs in corporate history.
