Meta Platforms Inc. (NASDAQ:META) could generate as much as $22 billion in annual gross revenue starting in 2027 by renting out excess AI computing capacity, according to Evercore ISI analyst Mark Mahaney, who raised his price target to $860 from $820 this week.
With shares trading near $565, the target implies roughly 52% upside. Evercore’s compute opportunity depends partly on what GPUs rent for in 2027, and prediction market traders are already betting on those prices.
Evercore Sees $22 Billion From Just 7% of Meta’s Capacity
Meta reportedly plans to double its computing capacity from 7 gigawatts in 2026 to around 14 gigawatts by 2027. For perspective, one gigawatt is enough electricity to power approximately 800,000 homes.
Mahaney’s thesis is that Meta may not need all that capacity at all times. The company could rent the surplus to outside customers.
He estimates that commercializing half a gigawatt could generate $11 billion in annual gross revenue, according to a MarketWatch report.
At one gigawatt, just 7% of Meta’s planned capacity, revenue could reach $22 billion and add up to $4.32 in annual earnings per share.
The analyst reportedly described Meta as a rare potential “merchant seller” of compute at a time when the major cloud providers are effectively sold out. He framed compute sales as a “call option,” not a bet that Meta becomes a full-scale cloud provider.
GPU Traders Favor H100 Prices Above $2.50
Kalshi’s market asks what it will cost to rent an Nvidia Corp. (NASDAQ:NVDA) H100 chip for one hour in July 2027.
As of Tuesday, traders gave a 60% chance that the average price remains above $2.50 per hour, suggesting GPU rental prices could remain strong enough to support Meta’s compute opportunity.
The market tracks one chip type, though, and Meta’s actual revenue would hinge on utilization, costs and how much capacity it can spare.
Kalshi and Benzinga have an existing data collaboration agreement.
Meta Is Both a Compute Buyer and Seller
Meta remains a massive compute customer itself, with roughly $35 billion in announced commitments to CoreWeave Inc. (NASDAQ:CRWV) and up to $27 billion pledged to Nebius Group N.V. (NASDAQ:NBIS), a figure that includes $15 billion of potential additional capacity.
Meta can buy capacity where it faces shortages while renting out capacity it does not need.
CEO Mark Zuckerberg has said Meta received offers for its computing capacity at a "premium." However, he believes Meta can earn more by using that capacity to sell AI services than by renting it directly.
Meta plans to spend $130 billion to $145 billion this year, raising concerns that it could overbuild. Renting out surplus capacity would help offset that cost.
But Meta may need every available watt for its own AI ambitions. That is why Mahaney calls the $22 billion opportunity a "call option," not a forecast.
Image: Shutterstock
Login to comment