Meta Platforms shares fell as much as 4% on Thursday after Wolfe Research flagged massive capex for its cloud infrastructure push

By Danny Vena, CPA, The Motley Fool Published: July 2, 2026, at 8:20 AM PDT | Updated: 10:49 AM ET 3 min read

• META: -3.89%
• NVDA: -0.84%

Shares of Meta Platforms (NASDAQ: META) traded sharply lower Thursday morning, falling as much as 4%. As of 10:49 a.m. ET, the stock was still down 3.7%.

The catalyst that sent the social media titan lower was a Wall Street analyst's comments on the company's future.

Cloud Spending Spree

This week has been a rollercoaster ride for Meta investors. Early yesterday, rumors emerged that the company is working on blueprints to develop a cloud infrastructure business, according to a Bloomberg report. The purpose of this venture will be to establish a platform to sell Meta's excess computing power and provide customers with greater access to its popular artificial intelligence (AI) models, according to the report.

This would not only put the company in direct competition with established cloud infrastructure providers, including Amazon Web Services, Microsoft Azure, and Alphabet's Google Cloud, but also pit it against emerging neocloud operators CoreWeave and Nebius Group.

Wall Street has had a day to digest the information, and while this will no doubt represent significant potential upside for Meta and its shareholders, every rose has its thorns.

Analysts at Wolfe Research have crunched the numbers and concluded that Meta could potentially add 20% to its earnings per share (EPS) for every gigawatt (GW) of compute power it sells. That will come at a cost, however. The analysts suggest Meta's capital expenditures (capex) will increase to $200 billion in 2027, up from previous estimates of $160 billion, and will likely require a capital raise to support the higher spending.

You have to spend money to make money, as the old saying goes, and this case is no different. However, Meta is entering a market expected to exceed $500 billion for the first time this year, which represents a significant, ongoing new revenue opportunity for the company.

Moreover, at just 21 times earnings, Meta stock is selling at a significant discount to its big tech peers. That gives savvy investors the opportunity to pick up shares of this highly profitable company at a discount.

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