Meta Platforms' New Cloud Business Could Be a Game Changer for Its Stock
Yahoo Finance ·
Meta Platforms ( META 4.80% ) has been one of the best companies at applying artificial intelligence (AI) to its core business to drive growth. However, the stock has nonetheless struggled amid investor concerns about its high spending on data center infrastructure. The company helped allay investors' fears when it was announced that the social media giant planned to sell excess computing power and launch its own cloud business. The move would put it into the same business as Amazon , Microsoft , and Alphabet . Like all three of those companies, Meta has a strong, growing core business that generates substantial operating cash flow. However, it has been their cloud computing units that have driven growth for these companies, as demand for both AI infrastructure services and solutions has been insatiable. According to Bloomberg , Meta is still deciding whether to sell access to its computing infrastructure or host large language models (LLMs) in its data centers. Meta has developed its own LLMs, and many cloud providers offer their customers third-party AI models like those from Anthropic and OpenAI.
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