Meta is building a cloud business to sell excess AI computing capacity to outside customers essentially turning Meta's $125â$145 billion capex spend into a direct revenue line for the first time (Save this).
Meta has been the only major US hyperscaler without a cloud business, Amazon has AWS, Microsoft has Azure, Google has GCP and that missing revenue line has weighed on the stock every single time Zuckerberg raised capex guidance.
That objection just disappeared, now look at what the Wells Fargo model is actually telling you.
The bottom chart shows Meta's total compute capacity growing from 7.5 GW in 2025 to 21.2 GW by 2028 nearly tripling in three years.
The light blue section, AI-focused capacity goes from just 1.5 GW in 2025 to 13.2 GW in 2028, representing the excess compute that is now, as of this morning, a monetizable product instead of a pure cost center.
The table at the top prices what that capacity is actually worth.
Wells Fargo models $20 billion in revenue per gigawatt at an 85% operating margin meaning just 1 GW of resale generates $17 billion in operating income, $14.6 billion in net income, and $5.69 in EPS accretion, a 16.3% uplift to FY27 consensus from a single gigawatt.
Meta is sitting on a path to 13.2 GW of AI-focused capacity by 2028.
Even if they monetize a fraction of that externally, the math becomes enormous and the market is only now starting to price it in, which is why the stock is up 7.5% pre-market this morning.
The plan reportedly includes selling access to AI models hosted on Meta's infrastructure similar to AWS Bedrock where Meta runs the chips and data centers, hosts models including its own Llama and Muse Spark, and charges developers per token to access them.
That is not just a compute play but rather a B2B AI services business that turns Meta from a social media company into an enterprise AI platform with recurring revenue and cloud-level margins.
Zuckerberg has been telegraphing this for months
At the shareholder meeting in May he said a cloud business was "definitely on the table" and noted that companies approach Meta "almost every week" asking to buy compute at a premium.
The demand was always there but today Meta decided to answer it.
Meta generated $56.3 billion in revenue in Q1 2026, up 33% year over year, with ad impressions up 19% and 3.56 billion daily active users across its family of apps and that was before a single dollar of cloud revenue.
I am as bullish on Meta as I have ever been and the Capex the market has been punishing them for just became the asset.
Meta has been a core position in the Milk Road portfolio and today is exactly why.
If you want to see every position we're holding, what we're buying next and our entire thesis, come join us just for a dollar!
$META
BREAKING: Meta is now building a cloud business to sell excess AI compute, as per Bloomberg.
If this is trueâŠthen it is exactly what the market has been waiting for.
- Justifies the heavy capex spend
- Diversifies a line of business outside of advertising
- If META can sell computeâŠthey can probably begin selling more B2B agentic services to those same clients using their compute
- Compute constraint narrative-driven stocks have RALLIED all yearâŠadding that narrative to
$META could be a potential game changer to sentiment around the stock.
This is personally a pivot I have been waiting for all year as a shareholder and as annoying as it has been to buy this name (this rip might end up being sold off) this was one of the CORE reasons to continue DCA-ing.
Hoping this is true but if Zucks gets into the neocloud gameâŠit could be very exciting.
LFG.
