How to Think About META's Jump Into The Cloud

Research evidence excerpt

How to Think About META's Jump Into The Cloud

July 1, 2026 | 13:23 ET~

Meta Platforms, Inc.

META-NSDQ Rating Price: Jun-30 Target Total Rtn Online Advertising & AI

Market Perform $563.29 $720.00 28%

Brian J. Pitz Analyst

brian.pitz@bmo.com (212) 671-8052

David Lustberg VP Associate

How to Think About META's Jump Into The Cloud David.lustberg@bmo.com (332) 274-9716

Charlotte O'Hanlon Associate

charlotte.ohanlon@bmo.com (347) 514-0382

Bottom Line: Stan Velikov, CFA VP Associate

META shares have reacted positively to reports that META will begin a cloud business in stan.velikov@bmo.com (415) 216-2047

which it will sell its excess compute to customers. Legal Entity: BMO Capital Markets Corp.

The decision provides META with a clearer and more immediate ROI on ~$141B of 2026E 2YR Price Volume Chart

CapEx, helping ease concerns about its elevated CapEx levels. Our model is unchanged 900

as we await further details and the size/scale of the cloud offering, which is a clear 800

tailwind to Revenue/Operating Income. 700

600 80Maintain Market Perform and $720 Target Price, but are incrementally positive on 90 70

the shift towards an ROI-generating business. 500 504030

400 0

Key Points LHS: Price ($) / DecRHS: Volume (mm) Jun Dec Source: FactSetJun

What Happened: Following recent comments from Mark Zuckerberg that META may Company Data in $

create a cloud business, credible reports from Bloomberg suggest META will begin Dividend $2.10 Shares O/S (mm) 2,538.4

selling excess compute capacity to external customers. Despite no official company Yield 0.4% Market Cap (mm) $1,429,867

comments, shares have reacted positively to the report, which we believe will create

EV (mm) $1,427,205 Net Debt (mm) $(18,119)

new revenue streams that help to offset fears of overspending on AI.