Meta May Forgo $5 Billion Cloud Revenue as Muse AI Drives $1,000 Target

1 articles · Updated · CNBC · Oct 6

Wells Fargo cut 500 megawatts of Meta capacity resales from its 2027 model, removing about $5 billion in high-margin cloud revenue because Muse's early traction suggests Meta will need the compute internally.
The bank still raised its price target to $1,000 from $796, arguing Muse could become a far larger business than renting out excess capacity even if the payoff comes later.
Meta's AI build-out is expected to keep spending elevated, with Wells Fargo projecting roughly $212 billion in 2027 operating expenses versus a $202 billion Wall Street consensus and trimming 2027 EPS to $31.18.
Muse launched on Sept. 8 and quickly shifted sentiment after months of concern over Meta's AI spending, helping the stock jump 27% in September while Wells Fargo sees 2028 as the year AI revenue contributes more meaningfully.