Metaplatform has finally delivered on the rally that Jim Cramer said would be possible if Wall Street became convinced that it could generate returns from massive investments in artificial intelligence. The big question here is where will the club’s stock go from here? Shares in the parent company of Facebook and Instagram have risen nearly 18% from their June 30 close before news that CEO Mark Zuckerberg plans to launch a cloud business. Jim, who has been considering the cloud idea for several weeks, said such an announcement could add $100 per share to struggling Meta stock, which rose more than 5% to more than $667 per share on Friday. Immediately after confirming the cloud news on July 1st, Jim said: “Up until today, our feeling was, ‘What the heck is Meta doing?'” At the time, he added that he was satisfied that Meta had a plan to start “a company that would be good for our customers.” In an interview with Bloomberg published Thursday, Zuckerberg discussed the cloud and rejected claims by bears that the move shows Meta is overbuilding its AI infrastructure. “The offers that we’re getting for the use of computing are so high that in some cases it might make sense to rent it or look at that kind of deal instead of using it internally,” he said. “I don’t know anyone in this industry who feels like there’s too much computing power.” On Friday’s morning meeting, portfolio director Jeff Marks said this week’s nearly 14.5% meta rise shows the Street is finally coming back to our view. Meta was the best performing stock this week. “The idea that Meta represents a form of further monetization of this huge capital investment cycle…that’s why the stock is going up right now,” Jeff explained. META 1Y Mountain Meta Platform 1 Year Investors are also celebrating Meta’s release of Muse Spark 1.1 on Thursday. This represents the company’s “most powerful model yet for agent and coding work,” Meta AI head Alexandr Wang said in an interview with CNBC. The upgrade allows you to write and debug your code. Use software and external tools. Understand text, images, and videos. Perform complex tasks with less human intervention. Spark will enable Meta to compete with leading AI labs like Anthropic and OpenAI by offering advanced AI coding and agent capabilities. Meta’s stock momentum this week is a change of pace after months of investors ignoring Meta’s flurry of AI-related announcements, from cheap smart glasses to a partnership with Qualcomm Chips. That’s because nothing directly addressed the biggest overhang in the stock price: the uncertainty of how Meta will benefit from its massive AI investment. Like competing hyperscalers, Meta has already invested billions of dollars to keep up with the AI arms race. Mr. Zuckerberg’s company expects to spend $135 billion in capital expenditures at the midpoint of this year’s guidance range. For comparison, Microsoft plans to spend about $190 billion on capital expenditures this fiscal year. This is above Meta’s outlook, but the main difference is that Microsoft has a cloud business to serve. Similar safeguards apply to Alphabet’s 2026 capex forecast of $180 billion to $190 billion and Amazon’s guidance of $200 billion. Indeed, CEOs at major tech companies are all feeling the pressure to demonstrate a return on investment for their AI spending. Alphabet last month opted to issue $85 billion in new stock to supplement its capital spending plans. Amazon has been issuing bonds, including news of a $25 billion bond sale announced this week. Conclusion Between the compute divestiture and the transition to a more capable artificial intelligence model, we think the stock should continue to recover if Meta can accomplish how it plans to monetize these investments beyond its traditional digital advertising business. we are good friends. Wall Street analysts overwhelmingly view Meta as a buy, with 91% giving it a hold versus just 9%. The average price target is near $821, implying an upside of more than 20%. This club has a rating of 1, which equates to Buy in the meta, and a target price of $750. Indeed, despite this week’s strong rally, the stock is only just above breakeven year-to-date. The stock still has work to do to get back to its all-time high of $790, which closed in August 2025. As a subscriber to Jim Cramer’s CNBC Investment Club, you can receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
