Meta rally gathers pace as cloud plans ease AI spending concerns

Meta Platforms shares rose nearly 18% from their June 30 close after reports that Chief Executive Mark Zuckerberg plans to launch a cloud business, according to CNBC. The move helped address a central concern for investors: whether Meta can turn its large artificial intelligence spending into revenue beyond advertising.

The Facebook and Instagram owner gained more than 5% on Friday to trade above $667 a share, CNBC reported. The stock advanced nearly 14.5% for the week and was the best-performing holding in CNBC’s Investing Club portfolio over that period, according to portfolio director Jeff Marks.

The cloud plan would allow Meta to rent out some of its AI computing capacity to outside customers. In practice, that means selling access to data-center processing power used to train or run AI models, a business already central to Microsoft, Amazon and Alphabet. For Meta, which has historically relied on digital advertising, the strategy could create a second route to monetizing infrastructure built for AI.

Jim Cramer had argued for weeks that Meta’s shares could add about $100 if investors believed the company had found a way to earn revenue from its AI buildout, CNBC said. After the July 1 cloud news, Cramer said the plan gave Meta a potential “profitable enterprise to their customers,” according to CNBC.

Zuckerberg addressed the cloud strategy in a Bloomberg interview published Thursday and rejected the view that Meta had built more AI capacity than it needs. “The offers that you get for using the compute are so high that it may make sense, in some cases, to rent out or consider those kinds of deals instead of your own internal uses,” Zuckerberg told Bloomberg. He added: “I don’t know anyone in the industry who feels like they have too much compute.”

Meta also introduced Muse Spark 1.1 on Thursday. Alexandr Wang, Meta’s AI chief, told CNBC the release was the company’s “strongest model for agentic and coding work yet.” CNBC reported that the model can write and debug code, use software and external tools, process text, images and video, and complete complex tasks with less human direction.

The release places Meta more directly against AI labs including Anthropic and OpenAI in coding and agentic AI, according to CNBC. Agentic systems are designed to take a goal, choose steps and use tools with limited human input, a capability companies are pursuing for software development and business automation.

The share move followed months in which investors gave limited credit to Meta’s AI announcements, including lower-cost smart glasses and a Qualcomm chip partnership, CNBC reported. The concern was that those products did not answer how Meta would earn an adequate return on its AI investment program.

Meta expects capital expenditures of $135 billion at the midpoint of its guidance range this year, according to CNBC. Microsoft plans roughly $190 billion of capital spending this calendar year, while Alphabet’s projected 2026 capital expenditure is $180 billion to $190 billion and Amazon has guided for $200 billion, CNBC reported.

Those peers have large cloud platforms that help justify data-center spending. CNBC reported that Alphabet issued $85 billion in new stock last month to help offset its capital expenditure plans, while Amazon has issued debt, including a $25 billion bond sale this week.

CNBC’s Investing Club said Wall Street analysts remain broadly positive on Meta, with 91% buy ratings and 9% hold ratings. The mean price target was nearly $821, CNBC reported. The club has a buy-equivalent rating and a $750 price target on Meta, while Cramer’s Charitable Trust is long Meta, Alphabet and Amazon, according to CNBC.

Even after the rally, Meta shares were only slightly above breakeven for the year, CNBC reported. The stock also remained below its record closing high of $790 reached in August 2025.

This story draws on original reporting from CNBC.