Meta CEO Mark Zuckerberg attends the annual Allen & Company Sun Valley Media & Technology Conference held at Sun Valley Resort in Sun Valley, Idaho, USA on July 9, 2026.
Brendan McDiarmid | Reuters
Meta Stocks rebounded on Friday and rose 15% this week, on pace for their best weekly performance since early 2024, amid growing optimism centered around CEO Mark Zuckerberg’s artificial intelligence strategy.
Three months after introducing Muse Spark, our first proprietary AI model, Meta made two important announcements this week. On Tuesday, Meta released Muse Image, a new AI model for image creation. This is part of an effort to attract creators and advertisers to the new subscription service. And on Thursday, the company announced Muse Spark 1.1, aimed at running agents and coding workloads.
This week’s revelations show that Meta is actively spotlighting AI models, including OpenAI, Anthropic, and googleall off to a great start. They also highlight the company’s efforts to diversify beyond advertising with new revenue streams, pointing to advances at the Meta Superintelligence Lab led by Alexander Wang.
Meta stock 5-day chart.
The recent rally has helped the stock erase this year’s losses and is now up more than 2%. Still far behind the Nasdaq, which rose 13%.
Meta also received a boost from reports that the company was developing a custom in-house AI chip, which was revealed in March as part of its data center expansion plans. According to Reuters, Meta plans to begin manufacturing its first chip, code-named Iris, in September as part of its goal to reach 14 gigawatts of computing power next year.
Bank of America analyst Justin Post said in response to the report that “Meta may have planned significant cost reductions that would bring the cost per megawatt of capacity much lower than we and the public expected.”
When Meta released its first quarter results in April, the company raised its 2026 capital spending forecast to $125 billion to $145 billion, and its stock price fell 7%. At the time, investors seemed concerned that Meta, despite investing heavily in AI, had yet to create new business areas.
Now, Meta is telling investors more concrete plans for how it will leverage its growing data center infrastructure in the highly competitive cloud computing business, including potentially competing with giants such as: Amazon and microsoftWall Street seems more at ease.
Nick Jomes, senior analyst at BNP Paribas Equity Research, said in a research note earlier this week that Meta could further raise its 2026 capex outlook when it releases its second-quarter results. Jomes said BNNP estimates that meth will raise that number to $135 billion to $155 billion.
“While we expect capital spending to increase in the near to medium term, we believe Meta is well-positioned to generate sufficient revenue to support spending through monetization of its AI initiatives, increased ad share, increased subscription revenue, optional cloud delivery, and external usage fees for AI models,” Jomes said in a research note. “Our recent subscription offers, potential cloud services, and access fees to our AI models have all delivered incremental revenue above our core advertising revenue, helping us diversify our revenue streams and generate additional EBITDA and free cash flow.”
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