Meta may ditch the idea of a cloud business for Muse. We think that’s a good trade
We may never get the Meta Cloud business we once envisioned, but we don't need it if Muse delivers.
TL;DR
- Meta Platforms may forgo potential cloud revenue to focus on its AI agent, Muse.
- Wells Fargo analysts removed $5 billion in expected capacity resales from 2027 estimates due to Muse's early success.
- The firm raised its price target on Meta stock to $1,000, citing Muse's potential for long-term business growth.
- Meta's strong advertising business provides flexibility to invest in AI infrastructure.
- Recent positive developments include a settlement in youth social media addiction litigation and the launch of Muse for consumers and small businesses.
- Analysts expect increased operating expenses for AI infrastructure but anticipate AI product revenue to contribute more significantly from 2028.