Meta Platforms: Vertical Integration Is The Play - Reiterating Strong Buy (Earnings Preview)

Meta Platforms is expanding into cloud hosting, leveraging underutilized GPU capacity as rental rates surge, reinforcing its enterprise AI ambitions. This pivot supports a vertically integrated AI stack, targeting agentic AI adoption and potentially enhancing operating margins as soon as eFY27. Cloud hosting could add $0.75/share to eFY27 EPS; META’s net cash position and discounted valuation support shareholder value. I reiterate a Strong Buy rating on META, with a $1,011/share price target at 17.13x eFY27 EV/EBITDA, citing margin-accretive growth potential.

Meta Platforms (META) has announced plans to expand its operations into cloud hosting services, capitalizing on underutilized compute capacity as GPU rental rates rise. While this may be viewed as a drastic shift away from Meta’s