Meta Platforms (META) stock climbed 1.4% in pre-market trading on July 6, attempting to recover from a sharp drop the day before. The stock currently trades around $585–$586.
The Thursday selloff came after CEO Mark Zuckerberg spoke at an internal town hall, where he admitted that Meta’s AI agent development “hasn’t really accelerated in the way that we expected” over the past four months. He also said the company’s internal restructuring had not yet produced the results leadership had hoped for.
Despite the admission, Zuckerberg told staff he expects more meaningful returns from AI investments within the next three to six months.
The pre-market bounce was partly supported by a cloud business announcement made earlier in the week. Reports surfaced that Meta is developing a cloud unit to generate revenue from excess AI computing capacity — a move that could include offering third-party access to AI models hosted on its own infrastructure.
Evercore analyst Mark Mahaney said Meta is unlikely to compete directly with major cloud providers like Amazon, Microsoft, or Alphabet. Instead, he sees it following a path closer to so-called neoclouds like CoreWeave and Nebius, which offer AI-specific computing products.
The cloud move matters because it reframes Meta’s heavy data center spending. Rather than looking like a cost with uncertain returns, that infrastructure could become a revenue source.
SpaceX has used a similar playbook — renting excess computing capacity to other players in the market at strong rates.
Meta’s underlying business is in good shape. Last quarter, revenue climbed 33% year over year to $56.3 billion. Ad impressions jumped 19% and average ad prices rose 12%.
The gains are driven in part by AI-powered recommendation tools that keep users on Meta’s apps longer and help advertisers better target and convert customers.
Despite that kind of growth, META trades at a forward price-to-earnings ratio of just 18 times this year’s analyst estimates — relatively cheap for a company growing at that pace.
The stock has pulled back from its 52-week high of $796.25 and currently sits closer to the lower end of its annual range of $520.26 to $796.25.
Macro conditions are providing a mixed backdrop. On July 6, the Nasdaq Composite was down 0.8% while the Dow Jones gained 1.1%, reflecting a rotation away from tech and growth names.
Meta also faces fresh regulatory pressure. India’s government issued a second warning in a single week, demanding the company remove child abuse content from its platforms.
The next big test comes on July 29, when Meta reports its next round of earnings. Investors will be watching closely for any update on AI progress, cloud revenue timelines, and infrastructure spending.
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