In the first half of this year, shares of Meta Platforms (META) traded as high as the $750 range and as low as $520.26. Last week was its breakout. META stock gained nearly 15%.
Shares soared for several reasons. Markets recalibrated the company’s valuation based on pivoting to renting out unused AI servers. In addition, Meta reported developments in its AI ambitions.
Last Thursday, Chief Executive Officer Mark Zuckerberg said that the company might consider building a cloud business. That would give customers access to its AI neocloud infrastructure. Monetization options include renting out excess computing capacity. Alternatively, it might give access to AI models that run on Meta’s servers.
Meta is copying SpaceX (SPCX) CEO Elon Musk’s strategy. Just before its IPO, SpaceX scored compute rental agreements with Alphabet (GOOG).
Oracle (ORCL) has an aggressive plan to build data centers, too. Unfortunately, the firm is accumulating heavy levels of debt. Investors, at first, renewed their bullishness for Oracle earlier this year. ORCL stock bottomed at around $140 in April to peak at around $250. Since June, ORCL stock has fallen nearly daily, closing at $140.64.
The neocloud market is in high demand. But as more AI models come online and more AI server supplies join the market, the neocloud market could become oversupplied.
Related Stories
