Meta's Cloud Push Sends Stock Soaring 9% and Silences Wall Street Bears

Shares of Meta closed up nearly 9% on Wednesday following news that the company is building out a new cloud business — one that could finally justify its staggering infrastructure bets. In 2024, Meta's capex totaled $37.2 billion, before rising to $69.6 billion last year — and is projected to nearly double this year to $135 billion at the midpoint of its guidance range. In the past, Meta defended its AI investments by saying they improved its advertising business, but the spending began to severely crimp free cash flow, making some investors uncomfortable. The company is debating whether to offer access to AI models hosted on its infrastructure or sell access to raw computing power. The move throws Meta into fierce competition with Amazon, Microsoft, Google, and CoreWeave — and shares of neocloud companies CoreWeave and Nebius Group both plunged about 12% each on the news. Of the four U.S. hyperscalers, Meta is the only one that doesn't currently sell cloud infrastructure and services.