Investors Are Underestimating This Incredibly Cheap Artificial Intelligence (AI) Stock. Buy It Before It Joins the $2 Trillion Club

Meta’s stock jumped nearly 9% on July 1 after a Bloomberg report said the company is planning to sell excess AI cloud computing capacity. Meta is forecast to spend $135B on capex this year (vs. $72.2B last year), while Q1 revenue rose 33% YoY to $56.3B but adjusted EPS increased only 14% amid heavy investment. The article argues that monetizing unused AI infrastructure could accelerate bottom-line growth (estimated +8.5% in 2026) and support strong multi-year valuation upside.

Analysis

The market is really re-rating META’s capex from a pure drag into a partially monetizable asset base. That matters because the stock has been trading on whether AI spending is economically rational; even modest third-party utilization can compress the payback period and support multiple expansion before any meaningful P&L contribution shows up.

The bigger second-order effect is competitive, not revenue. META is not suddenly a true hyperscale cloud peer, but if it can package compute plus model access, it improves its bargaining power with advertisers and makes its infra spend look more disciplined versus GOOGL and the other ad/AI platforms. The likely beneficiaries are indirect—GPU vendors and power/network infrastructure still get paid—but the key loser is the bear case that META is simply burning cash on AI with no external monetization path.

Near term, the stock can stay momentum-driven for days to weeks, but the real catalyst is the next earnings call: management commentary on utilization, depreciation, and whether this is a small experiment or a repeatable business line. Over 6-18 months, the thesis is only durable if AI tools keep lifting ad ROI while incremental cloud revenue arrives without forcing another step-up in capex; otherwise this becomes a story of leverage, not earnings power. The contrarian risk is that the market is overestimating the margin profile of cloud services and underestimating the operational complexity of serving external customers with infrastructure built primarily for internal use.

Key Decisions for Investors

• Buy META on pullbacks over the next 1-2 weeks rather than chasing the gap; the trade is a post-news valuation reset, not an immediate earnings upgrade. Falsify if the next update lifts capex again without showing better utilization or EPS revision.
• Pair trade: long META / short GOOGL into the next 1-3 months. This isolates the view that META is taking more ad share and proving faster AI monetization, while hedging broad megacap tech beta; cover the short if GOOGL reaccelerates ad growth or META’s AI conversion metrics stall.
• Use a defined-risk bullish options structure in META for the next earnings cycle if implied vol remains elevated: call spreads rather than outright calls. The upside is that any explicit monetization disclosure can extend the rerating; the risk is limited if management frames this as opportunistic excess-capacity sales only.
• Watch the next earnings print for three falsifiers: capex guide above current consensus, no disclosure of external compute revenue, or slowing ad revenue growth. If any two appear, reduce long exposure and fade the rumor-driven move.