Morgan Stanley has reaffirmed its Overweight rating on Meta, setting a target price of $775, which suggests a 37.6% upside from its recent closing price of $563.29. The investment bank's report, released on July 1, highlights Meta's potential venture into cloud computing, focusing on renting out idle computing power rather than developing a full-scale cloud service like AWS. This strategy could enhance Meta's earnings per share by 8% by 2028 if 250 MW of computing power is rented at $40 per watt, with potential accretion reaching 33% at 1000 MW. The report also notes that Meta's computing power is expected to grow to 1.9 GW in 2026 and 3.4 GW in 2027, providing ample capacity for this rental strategy. Morgan Stanley projects Meta's capital expenditure to reach $175 billion by 2027, with potential increases if the cloud business expands. The earnings accretion from the cloud initiative is seen as a transitional benefit rather than a core factor in the rating decision.