CoreWeave drops 11% after Meta announces cloud business plan

Leo Sun, The Motley Fool Sat, July 11, 2026 at 4:50 AM PDT | 4 min read

Tickers: META | CRWV | NVDA

On July 1, multiple media outlets reported that Meta Platforms (NASDAQ: META) is forming a new business unit, internally named "Meta Compute," to sell its excess AI cloud capacity to third-party customers. Meta plans to offer both raw GPU computing power and remote access to its infrastructure, enabling companies to run their own AI models.

Shares of CoreWeave (NASDAQ: CRWV), a leading neocloud provider offering similar services, have fallen nearly 11% since the news broke. The question for investors: does this pullback present a buying opportunity or signal deeper trouble ahead?

Why Meta's Strategic Shift Hurt CoreWeave's Stock

Meta's move surprised CoreWeave investors, particularly because Meta had just agreed in April to pay CoreWeave $21 billion through 2032 for neocloud services. Meta also signed a similar multi-billion-dollar deal with another neocloud company, Nebius (NASDAQ: NBIS).

At first glance, it may seem contradictory for Meta to sell cloud computing capacity when it clearly needs it. Additionally, Meta's agreements with CoreWeave and Nebius prohibit it from reselling any of that cloud computing power, meaning Meta can only sell excess capacity from its own first-party data centers.

However, Meta plans to invest up to $145 billion this year in expanding its own AI infrastructure. As it builds more data centers, some servers will remain idle until fully utilized by its social networking platforms and AI services.

To avoid wasting capital and energy on underutilized servers, Meta intends to rent them out to third parties — a move that could position it as a formidable competitor to companies like CoreWeave and Nebius. CoreWeave's other major customers, including Jane Street and IBM (NYSE: IBM), could eventually follow a similar strategy if they expand their own cloud infrastructure.

On a positive note, CoreWeave's largest customer — Microsoft (NASDAQ: MSFT) — is unlikely to pursue the same path, as it is already one of the world's largest cloud infrastructure companies. Instead, CoreWeave will continue to serve as an "overflow tank" for Microsoft's cloud services.

Does the Pullback Represent a Buying Opportunity?

Analysts project CoreWeave's revenue will surge from $5.1 billion in 2025 to $40.3 billion by 2028, while adjusted EBITDA is expected to rise from $3.1 billion to $25.7 billion over the same period.

With an enterprise value of $91.2 billion, CoreWeave appears attractively valued at:

• 7 times this year's revenue
• 13 times this year's adjusted EBITDA

While Meta's move is concerning, it does not undermine the core bullish thesis for CoreWeave. Even if Meta sells idle computing power to reduce costs, it does not necessarily mean other companies will choose to rely on the social media giant's infrastructure. Independent neocloud providers like CoreWeave and Nebius are likely to remain appealing options as the AI market continues to expand — suggesting this pullback could be a buying opportunity.

Image source: Getty Images.