On March 22, Dutch lawmakers passed a motion seeking to block Meta Platforms (FB) from building a major data center in the country until certain concerns are addressed, according to a Reuters report. Meta stock rose 2.4% to close at $216.65 on March 22.
The Mark Zuckerberg-led Meta is the parent company of social media brands Facebook, Instagram, and WhatsApp. It also makes hardware products, such as virtual reality headsets through its Reality Labs unit, formerly known as Oculus.
The Project Raises Environmental Impact Concerns
Meta plans to construct the data center in the Netherlands’ Zeewolde region, which is located 50 kilometers from Amsterdam. Zeewolde approved plans to build the facility in December 2021. But the project has faced opposition from environmentalists. Their major concern is that the project could have an adverse impact on the Netherland’s sustainability efforts.
The company plans to power the data center with renewable energy. The facility will consume 1.38 gigawatt hours of electricity. Some feel that is too much to take from a country with limited renewable energy supply. The motion passed in the Dutch Senate asks the government to stop Meta’s data center project until its compliance with the country’s environmental regulations is determined.
Dutch Data Center Association
However, not everyone is for delaying Meta’s data center project. Stijn Grove, the managing director of the Dutch Data Center Association, told Reuters that the Senate’s action is a political move that has been largely taken because the company in question is Meta.
The nearly 60 data center operators in the Netherlands consume only about 2.8% of the country’s national electricity, according to Grove’s association. Grove says that data centers, such as the one that Meta wants to build are necessary to improve Europe’s digital infrastructure. For a country like the Netherlands, such a project would support its goal to be a digital leader.
Wall Street’s Take
On March 22, MKM Partners analyst Rohit Kulkarni maintained a Buy rating on Meta Platforms with a price target of $365, which indicates 68.5% upside potential at the time of writing.
While remaining bullish on Meta, Kulkarni noted that TikTok is closing the gap with Meta social apps on functionality and advertiser spending. The analyst mentioned that while TikTok may not displace Facebook and Instagram, its expansion is taking some growth opportunities from Meta properties.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 32 Buys, 13 Holds, and one Sell. The average Meta price target of $325.10 implies 50.75% upside potential to current levels, at the time of writing. Meanwhile, FB shares have declined 36% year-to-date.
TipRanks data shows that financial blogger opinions are 89% Bullish on FB, compared to a sector average of 69%.
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