Senior Analyst: Meta Is Chasing A $2 Trillion AI Compute Opportunity, But It’s Years Behind

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Jefferies Senior Internet Analyst Brent Thill recently appeared on a CNBC Squawk Box segment to argue that Meta Platforms (NASDAQ:META) is making the right strategic move by entering the enterprise AI infrastructure market, even if it’s arriving years after established competitors. Meta’s planning to launch a cloud infrastructure business selling excess AI computing capacity, sending the stock up 7.56% on July 1, before falling 4.60% on July 2.

Jefferies Sees A $2 Trillion AI Compute Opportunity

Thill’s bull case rests on backlog. He says Google, Amazon, and Microsoft collectively carry a $2 trillion backlog of compute demand, which he reads as a signal that any credible fourth entrant with capital can capture a profitable slice. Thill argues that everyone is “sold out for six months,” that you cannot get enough compute, and that prices have actually risen across the three incumbents. Even with Meta entering the market “late,” he doesn’t expect Meta will have to compete on price in the near term.

Meta has the balance sheet to fund the build. Q1 FY2026 revenue came in at $56.31 billion, beating the $55.56 billion consensus, with operating cash flow of $32.23 billion. Management raised full-year 2026 capital expenditure guidance to $125-$145 billion, citing “higher component pricing and additional data center costs.”

Thill argues that Meta is cheap and “the most hated large-cap internet name,” carrying “$35 of earnings power” that, in his view, does not require a rich multiple to justify. Meta currently trades at a forward P/E of 18, with a current share price of $585 vs analysts’ average price target of roughly $828.

Meta Is “Really Late” To AI Compute

Thill says Meta is “really late,” that it will take a lot of money to keep up, and that Amazon controls close to 50% of the cloud market after decades of building. On execution, he expects Meta will need to win small and midsize enterprises first, then rebuild customer service and go-to-market motions. He draws a parallel to Google’s multi-year cloud ramp after hiring Thomas Kurian.

There is already competitive friction. According to a recent report, “Google also limited Meta’s access to its Gemini AI models due to computing constraints,” underscoring how tight capacity is even for hyperscalers themselves.

Execution Will Determine Whether Meta Wins

Meta’s move into enterprise compute gives the company access to one of the fastest-growing markets in technology, but success is far from guaranteed. Thill believes supply constraints and strong demand create an attractive opportunity, even for a late entrant. The bigger question is whether Meta can build the enterprise relationships, sales organization, and cloud infrastructure needed to compete with Amazon, Microsoft, and Google over the long term.

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