Meta cloud plan lifts 2026 laggards in mixed U.S. market start to Q3

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Meta cloud plan lifts 2026 laggards

Highlights

Meta Platforms surges over 10% after announcing plans to build a cloud computing business to monetize its data centers and AI infrastructure.
Wells Fargo gains more than 3% as Goldman Sachs adds it to the U.S. Conviction List with a $93 price target, despite two consecutive revenue misses and an 8% YTD decline.
June U.S. nonfarm payrolls report, due Thursday, is expected to show 100,000 job gains, 4.3% unemployment, and 3.5% average hourly earnings growth, shaping Federal Reserve policy expectations.

Cloud strategy and analyst calls drive trading

As first reported by Bloomberg, Meta Platforms plans to build out a cloud computing business to monetize its data centers and other AI infrastructure, a move that sends the stock up more than 10% and helps ease investor concerns about heavy AI spending. The development is later confirmed by Jim Cramer, and it addresses a key debate around whether Meta can generate broader returns from the large capital commitments it has made to AI.

Meta has so far monetized AI mainly through advertising, while rivals Amazon, Microsoft and Alphabet already operate major cloud businesses through AWS, Azure and Google Cloud. A remaining question for investors is whether the new cloud push signals excess capacity at Meta's data centers or a broader revenue expansion strategy, though the market view outlined in the report is that industry-wide capital spending is unlikely to fall.

Palo Alto Networks also extends recent gains after Wells Fargo raises its price target to $420 from $325 and names the cybersecurity stock an overweight tactical buy for the third quarter. The shares have rallied 24% since last Thursday, prompting profit-taking by the portfolio on Tuesday.

Banks and labor data shape near-term outlook

Financial stocks are among the stronger performers, with Wells Fargo rising more than 3% after Goldman Sachs adds the bank to its U.S. Conviction List and assigns a $93 price target, implying about 8% upside from current levels. Goldman argues Wells Fargo is shifting from defense to offense as it expands its balance sheet after the removal of its asset cap, although the pace of that transition has trailed some expectations.

Wells Fargo has missed revenue expectations for two straight quarters and remains down about 8% so far in 2026, underperforming major bank peers that are in positive territory. That weak run may lower expectations ahead of earnings due July 14, but another miss could increase pressure on investors to reassess positions after substantial long-term gains.

Attention now turns to the June nonfarm payrolls report, due a day earlier than usual because U.S. markets are closed Friday for the Fourth of July holiday weekend. Economists surveyed by FactSet expect the U.S. economy to have added about 100,000 jobs last month, with unemployment holding at 4.3% and average hourly earnings rising 3.5% from a year earlier, figures that could influence the Federal Reserve's policy outlook if labor conditions stay firm and inflation remains elevated.

In our earlier analysis of Meta Platforms (META), we highlighted the company’s push to expand AI infrastructure and potentially monetize surplus computing power by developing a high-margin cloud business. We also noted that despite a strong weekly gain, the stock was still trading below key medium-term moving averages, leaving the technical outlook cautious and making key resistance and support levels central for near-term positioning.

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