Meta Platforms (META) is considering selling "raw" compute capacity to external companies or access to certain AI models hosted on its existing infrastructure, Bloomberg reported, and UBS Securities said Wednesday in a note that either option could address some of the duration concerns that have weighed on the stock.
The incremental revenue would alleviate concerns that 2027 earnings per share will be flat or compress versus 2026. UBS expects EPS of $32.67 in 2026 and $32.98 in 2027, according to the note.
UBS said Chief Executive Mark Zuckerberg previously indicated in May that building a cloud business to compete with Amazon Web Services and Microsoft Azure was "on the table" if Meta found it had overbuilt compute capacity.
As this new line of business was not among the long-term opportunities Zuckerberg had previously flagged, some investors may be wary of such a pivot, the brokerage said.
UBS kept a buy rating on Meta Platforms with a price target of $865 and made no revisions to its estimates, citing a lack of confirmation from the company on the potential sale news.
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