After firing nearly 8,000 employees globally this year, META CEO Mark Zuckerberg is hinting at entering the Cloud compute business and taking on Amazon Web Services (AWS) and Microsoft’s Azure. The social media giant has invested close to $145 billion to scale up its AI infrastructure. However, it has mostly stayed away from Cloud computing. The company could see winds of change as the Cloud business is brimming with demand, and an entry into the sector could also boost META’s revenue and its stock prospects.
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META Stock Gains After Zuckerberg’s Statement on Cloud Computing Thrills Wall Street
Zuckerberg’s first hint came during the annual shareholders’ meeting on Wednesday, and he was asked whether the company plans to compete against Amazon and Microsoft in Cloud computing. He answered that the option was “definitely on the table.” Meta stock also surged from $609 to $632 on Wednesday’s trading session after the news of his statement broke.
His comment gathered massive traction on Wall Street, which made META stock surge in value. Zuckerberg was also asked a follow-up question on CNBC about the Cloud computing prospects. The CEO explained that several companies have approached them asking for Cloud services almost every week. “Almost every week there are different companies that come to us from outside asking us to both stand up an API service or asking if we have compute that they could buy from us at some premium to what we’ve bought it at.”
If META enters the Cloud computing space, it will have to compete with Amazon, Microsoft, and Google. These have already established a base in the industry, and Zuckerberg will have to squeeze his way into the sector. However, if his new enterprise fails to dislodge these three companies’ dominance, META stock will be at risk of crashing. Wall Street fears Zuckerberg, as he has a history of overpromising and underdelivering. The most recent is the Metaverse debacle, and layoffs have been ongoing since then.
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