Meta plans to open cloud infrastructure business

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Tech company Meta is reportedly planning to open a cloud infrastructure business alongside its other verticals, according to Bloomberg. If confirmed, the move will push Meta into competition with other tech companies in the magnificent seven that have well-defined cloud infrastructure businesses. 

Since its founding in 2004, Meta’s core business has been focused on advertising, mainly through its oldest social media platform, Facebook. The AI-cloud business as of now is dominated by three main firms: Amazon Web Services, Microsoft Azure, and Google Cloud. 

Meta’s latest quarterly report (Q1 2026) shows that the company has reported $56.31 billion in revenue and a net income of $26.8 billion. Diluted earnings per share were recorded at $7.31. A majority of this revenue comes from social-based advertising across Facebook, Instagram, and WhatsApp. 

The update follows Meta’s decision last week to hire Kunal Shah as CEO of WhatsApp.  

Meta closed up in share value by 8.81% in trading on the same day, but all stock indexes in America closed in the negative on Wednesday. According to TIKR terminal, they moved by the following amounts:

• S&P 500 (SPY): −0.16%
• NASDAQ (QQQ): −0.80%
• Dow Jones (DIA): −0.12%
• Russell 2000 (IWM): −0.31%

In the view of the SGFX research desk, recent volatility in Asian and American stock indexes appears to reflect, in part, continued expansion in AI investment and infrastructure buildout.

From a sectoral perspective, even though Meta has increased in share price, Wednesday’s stock movements showed more bullishness in defensive sectors while growth sectors like technology and semiconductors floundered. (Source: TIKR terminal data)

• Technology: −1.59%
• Health Care: +0.45%
• Real Estate: −0.18%
• Financials: 0.00%
• Utilities: −0.15%
• Communication Services: +1.72%
• Consumer Discretionary: +0.14%
• Consumer Staples: +0.22%
• Industrials: −0.59%
• Energy: −0.32%
• Materials: +0.14%
• Aerospace & Defense: +0.03%
• Biotechnology: +0.25%
• Medical Devices: +0.14%
• REITs: +0.02%
• Semiconductor: −3.38%
• Software: +1.83%

Summary

Meta’s plan to open a new segment will be targeting a new demand on the infrastructure side of cloud storage. In the view of SGFX research desk, more details are required to make an assessment of whether Meta’s investments in cloud infrastructure will pay off. 

Research references

• Nvidia Offers Revenue Sharing Model for Aspiring AI Startups - Bloomberg
• TIKR terminal data
• Bloomberg data

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