Business Insider Meta stock rallied on Wednesday after a report said it's getting into the cloud computing game with the aim of selling excess compute capacity.
- Meta stock popped on Wednesday after a report said it will sell excess AI compute. - The social media giant will launch a new cloud business in order to sell it.
- Despite the share spike, Meta shares are still down 8% year to date.
Investors cheered news that Meta could get into the cloud computing game on Wednesday.
Shares of the Facebook and Instagram parent surged as much as 10% after Bloomberg reported that the company is planning to launch a cloud business that will sell excess AI compute capacity. The move would put it in direct competition with cloud giants like Microsoft, Amazon and Alphabet.
Even with Wednesday's gain, the stock is still down 8% year to date. Investors are grappling with rising jitters about soaring AI spending and the sustainability of the AI trade as it powered a blistering hot streak in the second quarter.
Meta is among the tech "hyperscalers" spending huge amounts on building AI infrastructure and data centers as it races other tech firms for dominance in the space. Bloomberg's report says that the company could sell excess compute generated by its data centers or even offer customers access to its AI models.
It would be a new frontier for the tech giant. To date, the company has pursued its AI buildout to further its own ambitions. The move could also put it in competition with infrastructure providers like CoreWeave, which rents out compute power to customers developing their own AI tools.
CEO Mark Zuckerberg had previously said that Meta was "not necessarily" a developer tools company, though he wasn't against building a coding agent.
The plan could also help offset some of the massive spending that's spooked some investors lately. Meta, along with Microsoft, Google, and Amazon, are planning to spend $725 billion this year alone, and Meta has aggressively cut headcount to fund its AI projects.
But markets haven't always been thrilled to digest such huge numbers. Meta in particular saw it's stock plummet after its latest earnings release as it boosted its capex plan for the year to $125 billion to $145 billion.
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