Meta Stocks Rally 15% on AI Strategy, Best Week Since Early 2024

Meta shares rallied on Friday, posting a 15% gain for the week, the best weekly performance since early 2024, as investor optimism builds around CEO Mark Zuckerberg's artificial intelligence strategy. The rally followed two major AI announcements this week: the release of Muse Image on Tuesday and Muse Spark 1.1 on Thursday. The developments underscore Meta's aggressive push to compete with OpenAI, Anthropic, and Google in AI models while diversifying revenue streams beyond advertising.

Meta Releases Two AI Models in One Week

Three months after introducing the Muse Spark, its first proprietary AI model, Meta made two significant announcements this week. On Tuesday, Meta released Muse Image, a new AI model for creating images, part of an effort to attract creators and advertisers to its offerings. On Thursday, the company unveiled Muse Spark 1.1, aimed at running agentic and coding workloads. Meta Superintelligence Labs, led by Alexandr Wang, is driving these efforts.

Meta Advances Custom AI Chip Manufacturing

Meta is progressing with its custom, in-house AI chips, revealed back in March as part of its data center expansion plans. According to Reuters, Meta expects to start manufacturing its first chip, code-named Iris, in September as part of its goal to reach 14 gigawatts of computing power next year. Justin Post, an analyst at Bank of America, wrote following the report: "Meta may have engineered significant cost savings to get capacity cost per MW well below our and Street expectations."

Meta Stock Erases Year-to-Date Losses

With the latest rally, the stock has erased its losses for the year and is now up more than 2%. It's still way behind the Nasdaq, which has gained 13%.

FAQ

What triggered Meta's 15% weekly stock rally? Meta's stock rallied following two AI announcements this week: the release of Muse Image on Tuesday and Muse Spark 1.1 on Thursday, alongside progress reports on custom AI chip development.

When will Meta start manufacturing its Iris AI chip? Meta expects to start manufacturing its first custom AI chip, code-named Iris, in September as part of its data center expansion plans.