Why Meta Platforms Stock Crashed Thursday Morning

Meta Platforms dropped 3.7% to 4% Thursday after Wolfe Research analysts flagged a major cost concern tied to the company's reported cloud computing ambitions. The firm projects Meta's capital expenditures could balloon to $200 billion by 2027—a $40 billion jump from the prior $160 billion estimate—if the company pursues its rumored cloud infrastructure buildout.

Wolfe Research acknowledged the upside: the cloud market exceeds $500 billion in total addressable opportunity, and each gigawatt of capacity sold could deliver roughly 20% earnings-per-share upside. Meta currently trades at 21x forward earnings, an attractive multiple relative to its growth profile.

But investors focused on the near-term cash burn. A $200 billion capex commitment through 2027 would rank among the most aggressive infrastructure spending plans in tech, rivaling hyperscalers already entrenched in the space. The sell-off reflects concern that Meta may be spreading capital across too many fronts—AI, Reality Labs, and now potentially cloud—without clear line of sight to returns.