Meta may be walking away from a potential cloud business, and Wells Fargo thinks that is the right call. In a note cited by CNBC, analysts cut 500 megawatts of expected capacity resales from their 2027 estimates — roughly $5 billion of high-margin revenue — because the early success of Meta's Muse AI agent makes it likely the company will need that computing power internally. They raised their price target on Meta to $1,000 from $796.
Muse launched Sept. 8 and quickly shifted the conversation around the stock, which rose 27% in September. Meta has also announced an enterprise platform and a small-business version of Muse. Wells Fargo compares the setup to the early days of Reels, but cautions that meaningful financial results may not show up until 2028. The firm sees operating expenses reaching about $212 billion next year, above consensus, and cut its 2027 earnings estimate to $31.18 per share before expecting $40.02 in 2028.
The trade-off, according to the note, is that Meta's advertising engine gives it room to invest for the long term rather than renting out idle compute. The analysis is based on a single Wells Fargo note, and no contrasting estimates are reported in the source.