Meta Shares Are on Track for Their Best Weekly Performance in 2.5 Years Thanks to New AI

Shares of Meta Platforms, the parent company of Facebook and Instagram, rose 5.9% on Friday, reaching their highest level since April. This brings their weekly gain to 15%, which could be their best performance since the start of 2024, according to CNBC. Investors are increasingly optimistic about CEO Mark Zuckerberg’s strategy in the field of artificial intelligence: the day before, the company announced that it would offer access to its new agent-based AI, Muse Spark, via a paid subscription, similar to what OpenAI and Anthropic do.

Thanks to the current rally, Meta shares have fully recouped their year-to-date losses and are now trading 0.5% higher. However, they still lag significantly behind the Nasdaq Composite, which has gained 12% this year.

Meta’s efforts in the field of AI could, it appears, put the company back on a growth track after nearly a year of stagnant stock performance, according to CNBC. This week, the company made two important announcements in this area. On Tuesday, it released Muse Image, a new image-generation model, and on Thursday, it unveiled Muse Spark 1.1, designed for agent-based tasks and programming, which will eventually be available via a paid subscription.

Meta is actively trying to make its mark in the AI model market and compete with OpenAI, Anthropic, and Google, which have gained a significant head start, according to CNBC. The company’s new strategy aims to reduce its reliance on advertising by tapping into new revenue streams, and it also highlights the progress made by Meta Superintelligence Labs, led by Alexander Wang, the network notes.

Reports of Meta’s progress in developing its own specialized AI chips provided additional support for the stock. According to Reuters, the company expects to begin production of its first chip, codenamed Iris, in September, with the goal of increasing the total computing power of its data centers to 14 gigawatts next year.

“Meta may have managed to achieve significant cost savings and reduce the cost of capacity per megawatt to a level well below our expectations and Wall Street’s forecasts,” wrote Bank of America analyst Justin Post after the announcement was released.

When Meta reported its first-quarter results in April, it raised its capital expenditure forecast for 2026 to $125 billion–$145 billion, after which its stock fell 7%. Investors were concerned about the massive spending on AI, which has not yet led to the emergence of new business lines, CNBC explains.

Just recently, the company announced that it would begin selling computing power, similar to Oracle and Amazon. On the day Bloomberg first reported this, Meta’s stock price jumped 8.5%. The company outlined a more concrete plan for using its ever-expanding infrastructure, and Wall Street appears to have become more accepting of these expenses, the TV channel notes.

It is possible that Meta will raise its 2026 expense forecast once again when it reports its second-quarter results, according to Nick Jomes, a senior analyst at BNP Paribas Equity Research. In his view, the company could increase its forecast to $135 billion–$155 billion. “While we expect capital expenditures to remain elevated in the short to medium term, we believe Meta is capable of generating sufficient revenue to fund them through the monetization of its own AI projects, increased market share in the advertising sector, additional revenue from subscriptions, the potential launch of a cloud service, and fees for the external use of its AI models,” Jomes wrote.

According to MarketWatch, 62 out of 68 analysts tracking Facebook’s parent company’s stock recommend buying it, while the remaining six recommend holding it. There are no recommendations to sell Meta shares. Wall Street expects the stock to rise 30% over the course of the year, based on the consensus price target of $823.

This article was AI-translated and verified by a human editor