Meta Stock Jumps $50 as Neocloud Bet Wins Over Wall Street

TLDR

• Meta is entering the neocloud space, planning to sell computing power externally to monetize its data center investments.
• The stock is up roughly $50 since Meta’s neocloud announcement.
• Wolfe Research reiterated an Outperform rating and $800 price target; META currently trades around $605.72.
• Wolfe Research raised its 2027 capex estimate for Meta to $220 billion, well above the Street consensus of $160 billion+.
• Meta’s 2026 capex is projected at $125–$145 billion; the company is also breaking ground on a new AI-optimized data center in Canada.

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Meta Platforms (META) stock is trading around $605.72, up $2.60 on the day, as a pair of bullish catalysts draw fresh attention to the company’s AI infrastructure buildout.

Meta Platforms, Inc., META

Jim Cramer flagged Meta on Mad Money this week, calling its move into the neocloud business a smart one. Meta, long one of the biggest buyers of compute, now wants to sell it too.

The pivot spooked some rivals. Neocloud stocks sold off last week on the news that Meta was stepping into their lane as a competitor.

Cramer pushed back on the bearish take. He argued the fact that compute can be rented out at a premium points to a shortage of data center capacity, not an oversupply. META is up about $50 since the announcement.

Wolfe Research Raises CapEx Estimate

Wolfe Research reiterated its Outperform rating on META Thursday, keeping its $800 price target intact. The stock is currently trading well below that, sitting around $605.72 — down from its 52-week high of $796.25.

The firm’s bigger move was on its capex forecast. Wolfe now expects Meta to spend $220 billion on infrastructure in fiscal year 2027, up sharply from a prior estimate of $15 billion in capacity. That figure sits well above the Street consensus of $160 billion or more.

Wolfe also revised its capacity estimate upward, now projecting Meta will have roughly 17 gigawatts of capacity next year, up from a prior estimate of 15 gigawatts.

The research firm had previously flagged that Meta was likely to raise capital expenditures and could pursue a capital raise through debt or equity to fund it.

For 2026, Meta’s capex is projected at $125–$145 billion, a steep increase from earlier forecasts. Wolfe said Meta will need to show investors clear, durable sources of non-advertising revenue to justify those spending levels.

Meta currently carries a return on invested capital of 25% and a debt-to-equity ratio of 0.36.

Canada Data Center and Ad Tool Integration

On the infrastructure side, Meta recently broke ground on a new data center in Sturgeon County, Alberta — its first in Canada and 33rd globally. The facility is optimized for AI workloads, represents an investment of over CAD $13 billion, and is expected to create around 3,000 construction jobs and more than 300 permanent roles.

Meta is also integrating its Muse Image model into its Advantage+ creative ad tool, adding visual reasoning and self-refinement features to its ad generation capabilities.

Erste Group upgraded META from Hold to Buy this week, citing the company’s AI investment outlook. Truist Securities also kept its Buy rating, pointing to Meta’s AI distribution advantage through the Muse Spark platform.

CEO Mark Zuckerberg has acknowledged that AI agent development has moved slower than expected. Separately, investor Michael Burry has opened short positions across AI infrastructure stocks.

Meta stock trades at $605.72, with Wolfe Research’s $800 price target implying roughly 32% upside from current levels.

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