Meta Is Reportedly Building a Cloud Business to Rival Amazon and Microsoft -- and a Way to Make Its Massive AI Bet Pay Off

Meta jumped 8.8% following reports the company is building a cloud business called Meta Compute to sell AI computing power and proprietary models, directly challenging Amazon and Microsoft's cloud divisions. The initiative could help monetize excess data center capacity and offset the company's projected $125-145 billion capital expenditure plan for 2026, according to The Motley Fool.

The cloud venture remains unconfirmed by Meta but represents a potential second revenue stream beyond advertising. Meta's core business posted 33% year-over-year revenue growth in Q1, demonstrating strong momentum in its legacy operations while the company ramps AI infrastructure spending.

The stock trades at 21x earnings, a modest multiple relative to growth rate and the scale of its AI buildout. If Meta Compute materializes, the company could recoup investment by selling compute cycles and AI models to enterprise customers, mirroring the playbook Amazon used to turn internal infrastructure into AWS.