BNP Paribas: Meta (META.US) has promising prospects for monetizing computing power, with potential beyond advertising to include "cloud" opportunities

Zhitong Finance APP has learned that, after meeting with company management, investment institution BNP Paribas believes that Meta Platforms (META.US) has considerable commercial monetization potential for its computing power assets.

Analyst Nick Jones wrote in a report to clients: “Management believes that the economic benefits of monetizing AI intelligence capabilities are much better than simply selling raw computing power. Meta will only allocate computing power to cloud service deployment when internal demand is lower than expected, and such cooperation will mainly focus on short-term or strategic projects.”

Jones further pointed out that, given the clear market opportunities, Meta is actively investing in multiple AI projects and continuously expanding its computing power scale. However, management is also aware that, due to the macro-political environment, supply-side constraints may emerge from 2028 onwards.

Looking deeper, Jones believes that Meta’s core advertising business will maintain “sustained” growth, while other revenue sources, including potential cloud services, will also drive the company's overall revenue to achieve “steady” increases.

“Although capital expenditure may continue to increase before 2027, we believe these investments will generate abundant revenue in the long run, sufficient to support the scale of its capital expenditures,” Jones added. “On the basis of cost control, we expect the company’s profit margin to return to an expansionary trajectory.”

Jones has set a target price of $855 for Meta and given it an “outperform” rating.

Last month, it was reported that Meta is building a cloud computing business aimed at selling its surplus computing power to external parties.

Meta CEO Mark Zuckerberg told investors at the annual shareholder meeting this May that selling surplus computing power was under consideration. “That’s definitely on the table,” Zuckerberg said. However, he added that Meta has not taken action so far because the company believes it still has practical internal demand for this computing power.