Krungsri Securities has highlighted Meta Platforms (META) as a potential opportunity for investors, especially given its underperformance so far this year (YTD -10.4%). The firm notes that while concerns remain regarding Meta’s increasing investment costs and lower-than-expected core business user activity, the company’s strategic shift could drive renewed interest amid a global risk-on backdrop, following softer US labor data.
A key driver for Meta is its new “Neo-cloud” approach. Historically, Meta has built data centers and purchased chips for internal AI use, resulting in significant opportunity costs. However, the Neo-cloud strategy enables Meta to temporarily lease out its excess computing capacity—a timely move as supply in the market remains tight.
Meta is expected to expand its own processing power by up to 3.5 GW by 2027. Rather than bearing heavy upfront costs while waiting for its AI commercial products to mature and generate revenue, Meta can now monetize idle capacity. Krungsri Securities estimates that every 250 MW leased could add 8% profit upside.
Krungsri argues that Meta’s transformation from a pure social media company to an AI infrastructure provider opens up new revenue streams not yet fully priced in by the market. Currently, Meta trades at a forward P/E of around 14.7, compared to major cloud peers trading between 22-25. The brokerage sees this as an opportunity for the valuation gap to close as the Neo-cloud strategy matures.
Meta also benefits from robust operating metrics. Its capex-to-cash-flow-from-operations ratio in 1Q26 stands at 61.55%, lower than Alphabet, Microsoft, and Amazon. Furthermore, Meta boasts the highest net cash per share among its peers ($8.77), offering greater flexibility to enhance shareholder returns and strategically allocate investments—either optimizing its core business or leasing out capacity through the Neo-cloud strategy.
Krungsri recommends a trading buy on META.US and DR META80, noting the stock’s attractive valuation and potential profit and multiple upside from the Neo-cloud initiative. Investors can access Meta through DR META80 or direct US shares via Krungsri iGlobal.
Risks include global economic slowdown affecting ad spending, possible regulatory action regarding social media monopolies in the US, and the need to monitor whether Meta’s cloud capacity is sufficient for Neo-cloud ambitions.
