The Real Reason Behind The Meta Stock Rising 8% And Why It Could Continue

Meta’s stock price rose as much as 8% on July 1 after reports emerged that the company is building a cloud business to sell excess AI compute power to outside customers. Meta is reportedly planning to monetize its unused capacity by offering either hosted AI models or raw computing power, CNBC’s Jim Cramer said. This move matters because it suggests that Meta may be able to turn part of its capex-heavy AI spend into a revenue stream instead of treating data centers as a pure cost center.

That shift is important for investors because Meta stock has been trading against the tide as investors question whether the company keeps spending aggressively on AI and can still prove the returns are real. Meta’s own first-quarter 2026 results showed why the market is still willing to give founder Mark Zuckerberg some credit. The company reported $56.31 billion in revenue, up 33% year over year, and an operating income of $22.87 billion, with management saying it expects 2026 capital expenditures of $125 billion to $145 billion.

Meta Stock Price Goes Crazy On AI monetization Story

The new cloud angle gives investors a clearer way to think about Meta’s infrastructure bill. On the company’s April 29 earnings call, Meta said it was signing cloud deals that would come online in 2026 and 2027, and that those agreements would help it scale faster while keeping flexibility over future spending.

That is why the market response was so strong, because if Meta can sell its spare capacity, then the capex story changes from “How much is this going to cost?” to “How quickly can this pay back?” For a stock that already benefits from strong ad demand, a second revenue path could support higher valuations. The rally pushed Meta stock back above the $600 mark after weeks of volatility, adding tens of billions of dollars to the company's market capitalization in a single trading session.

There is also precedent, as the idea of monetizing excess compute is not unique to Meta. Reuters has previously described similar industry behavior as the AI buildout becomes more expensive, especially as the broader backdrop is a tech sector trying to justify ever-larger AI bills with more durable revenue models.

Still, this is not a done deal. CNBC reported that the business is still being developed, and that Meta is still debating whether it will offer access to hosted models or raw compute. That means the exact product, pricing, customers, and margins are still unknown and likely undeveloped.

Why The Price Rally Could Continue

The case for more upside in Meta stock rests on three pillars. First, the company’s core advertising business remains healthy, giving it the cash flow to fund AI spending. Second, Meta has already told investors that it expects operating income in 2026 to remain above 2025 levels even after boosting capex guidance. Lastly, a cloud or compute business could become a new source of optionality if demand for AI infrastructure keeps outrunning supply.

However, there is also some risk if the company decides to go this route. Meta’s capex range of $125 billion to $145 billion is enormous even by Big Tech standards, and the company has warned that higher component prices and additional data-center costs are pushing spending higher. Thus, if the cloud effort stays small, delays, or ends up competing directly with bigger incumbents such as Amazon, Microsoft, and Google, the market may decide the stock’s bounce was more enthusiasm than earnings power.

There is also an operational wrinkle, as the company has been restructuring staff to offset AI investment. Business Insider reported back in May that Meta cut about 8,000 roles, moved more than 7,000 people into new AI-related work, and described the layoffs as part of a broader effort to run the company more efficiently. This doesn’t prove that Meta is all set on the cloud plan, but it does show that the company is already moving toward more AI-centric operations.