Meta stock rallies 15% in best week since 2024 as AI strategy wins over skeptical investors

Traders fall back in love with Meta. Here's where bulls see it going

Meta Platform's AI efforts are looking like the recipe for a comeback after an almost year-long drought in shares of the $1.7 trillion market-cap company. Shares of Mark Zuckerberg's social media giant jumped more than 6% Friday to the highest level since April, extending gains that began earlier this month when the company detailed plans to sell access to its AI computing capacity. On Thursday, the company launched Muse Spark 1.1, an AI coding product that will compete with Anthropic and OpenAI. Shares of Meta are flat on the year, while the tech-heavy Nasdaq-100 is up 18%. Options traders piled in on Friday, with volume on pace for more than three times the 30-day average and 78% of the stock's $1.8 billion in options premium tied to calls, according to data from Cboe LiveVol and SpotGamma. Some of the call-buying was likely offset with selling as well, with as many calls sold as bought, but more than twice as many calls were bought compared to puts, and eight of the top 10 contracts by volume were calls as of midday.

Meta's best week since 2024, explained by one word: compute

Meta's stock rose about 6% on Friday and roughly 15% on the week, its best week since early 2024, after the company gave investors a concrete plan to monetise its AI infrastructure via Meta Compute. Wolfe Research estimates each gigawatt monetised at a ~$25bn rate could lift EPS around 20%, and options volume ran over three times its 30-day average. But Meta Compute has not sold anything yet, has never served external cloud customers, and faces three entrenched hyperscalers. Meta has had a miserable year on the market, flat while the Nasdaq-100 climbed 18%. That changed abruptly, with the stock posting its best week since early 2024, CNBC reports. Shares rose about 6% on Friday and roughly 15% across the week. The move was not driven by advertising, the business that actually makes Meta's money. It was driven by a story about compute. What changed The catalyst is Meta Compute, a plan to sell AI computing capacity and models to outside customers. It would put Meta into a market currently held by Amazon, Microsoft, and Google. Investors had been anxious for months about the scale of Meta's AI capital spending with no visible route to a return. The company has now offered to rent out its spare AI compute, and the market treated it as relief. Mark Zuckerberg had already signalled the direction, saying an AI cloud business "makes sense". Turning a colossal cost centre into a revenue line is a straightforward pitch. The supporting pieces landed at the same time. Meta shipped Muse Image, its new image model, and is pushing its own MTIA chip into production to cut its dependence on Nvidia. How the bulls are doing the maths The numbers being circulated are aggressive. Wolfe Research reckons that for every gigawatt of compute Meta monetises at roughly a $25bn rate, earnings per share could rise around 20%. Options desks responded in kind. Volume ran at more than three times the 30-day average, with 78% of the $1.8bn in options premium tied to calls. Analyst targets have followed the mood, clustering in the low-to-mid $800s over twelve months. The published scenario range runs from about $720 at the bearish end to roughly $869 at the bullish one. Those are forecasts, not facts, and they are being made by people who were considerably less enthusiastic a month ago. Sentiment moved before any of this revenue exists. The part the rally is ignoring Meta Compute has not sold anything yet. Meta has never run a cloud business for external customers, and AWS, Azure, and Google Cloud have a decade of head start on operations, sales, and trust. There is also an uncomfortable reading of the same news. Selling excess capacity can mean shrewd monetisation, or it can mean the company bought more compute than it can use. And the human ledger has not improved. Meta cut 8,000 jobs while posting record revenue and pouring money into AI infrastructure, which is the same spending this rally is celebrating. What Wall Street bought this week was a narrative, and a plausible one. Whether Meta can actually sell compute against three entrenched hyperscalers is a question no share price can answer yet.

Meta's stock heads for best week since early 2024 as optimism builds around AI strategy

Meta shares rallied on Friday, lifting their gains for the week to 15%, on pace for the best weekly performance since early 2024, as optimism builds around CEO Mark Zuckerberg's artificial intelligence strategy. 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, and part of an effort to attract creators and advertisers to its offerings. And on Thursday, the company unveiled Muse Spark 1.1, aimed at running agentic and coding workloads. This week's revelations show Meta is aggressively trying to make a splash in AI models and compete against OpenAI, Anthropic and Google, which all have big head starts. They also underscore the company's efforts to diversify beyond ads with new revenue streams, and point to progress at Meta Superintelligence Labs, which is being led by Alexandr Wang.

Meta Stock Had a Lousy First Half. Here's Why the Tech Giant's Shares Are Rising Again

Shares are up nearly 20% so far this quarter, rebounding after posting one of the worst first-half performances among mega-cap tech stocks. Meta was the best-performing stock in the S&P 500 on Friday as investors continued to cheer the social media giant's push to monetize its AI investments. In an internal memo, Meta (META) laid out plans to double its cloud computing capacity to 14 gigawatts next year and begin producing its own AI chips with designer Broadcom (AVGO) in September, Reuters reported on Thursday. On Thursday, Meta also released its latest AI model, Muse Spark 1.1, which developers can pay to use through a new API platform. The shares jumped nearly 5% yesterday, and the stock was up another 5% in recent trading. Friday's gains pared Meta stock's year-to-date losses to about 4%, since the stock came into this week down nearly 12% since the start of the year. Wall Street started to ask questions about Meta's AI infrastructure spending this year, with some investors expressing concern the social media giant is spending hundreds of billions on data centers for its own use, unlike Alphabet (GOOG) and Amazon (AMZN), which sell computing capacity to cloud customers. Meta has been one of Big Tech's laggards this year. It was the only Magnificent Seven stock to fall in both the first and second quarters. And its 15% first-half decline was the second-worst of the Mag Seven, trailing only Microsoft's (MSFT) 23% slump. Sentiment has improved in the second half. Shares popped 9% on July 1 following reports the company is considering renting out unused computing capacity to third parties, similar to SpaceX's (SPCX) $1.25 billion-per-month agreement with Anthropic. Shares are up nearly 20% since that report. Bank of America analyst Justin Post, in a note earlier this week, argued Wall Street is undervaluing Meta's AI infrastructure. Post estimates investors are valuing Meta's computing capacity at just $4 billion per gigawatt, compared with Amazon's $59 billion and Alphabet's $110 billion. Post believes it's worth $12 billion per GW, with the potential for "significant upside considering specialized AI capacity that Meta is building." According to Post, SpaceX's recent deals with Anthropic and Google valued its specialized capacity at about $50 billion per GW. Investor enthusiasm for Meta's AI push has offset regulatory and legal headwinds facing its core social media business. The EU Commission on Friday said in a preliminary report that Meta violated its Digital Services Act with "addictive" features like infinite scroll and autoplay. The commission told Meta to change the violating design features, or risk facing a fine of up to 6% of its global revenue. Meta faces mounting scrutiny of its social media platforms and their impact on youth mental health and safety. The company lost two trials centered on child safety earlier this year, potentially setting a precedent for a slew of similar cases being litigated.

Meta Stock Turns Positive in 2026 as AI Revenue Plans Gain Focus

Meta Platforms stock moved higher on Friday as investors reacted to new details on artificial intelligence revenue plans, data center spending and model pricing. Shares rose about 6% during the session and gained nearly 15% for the week, marking the stock's best weekly performance since early 2024. The rally erased Meta's losses for the year. The stock had faced pressure from concerns over rising capital spending and slower returns from AI investment. The latest updates gave Wall Street more data on how Meta may turn heavy infrastructure spending into new sales outside advertising.

Why is Meta Platforms stock surging today? By Investing.com

Investing.com -- Meta Platforms stock surged 3.8% in pre-open trading after the company unveiled Muse Spark 1.1 on July 9, its most advanced AI model to date, targeting the fast-growing agentic and coding market in direct competition with Anthropic and OpenAI. Three months after releasing its first AI model under Chief AI Officer Alexandr Wang, Meta rolled out the update, with Wang describing it as the company's "strongest model for agentic and coding work yet." The move also marks a strategic shift, as Meta's effort to diversify its business now includes requiring developers to pay to access its new AI model -- a direct revenue stream from its AI investments that investors have long demanded. Adding further momentum, Meta's AI infrastructure story continued to build ahead of today's session. Meta plans to start manufacturing its AI chip code-named "Iris" in September as part of its MTIA project, with chip testing completed in six weeks showing no major issues, according to an internal memo reviewed by Reuters. The company is working with Broadcom for chip design and Taiwan Semiconductor Manufacturing Co for production, aiming to reduce dependence on Nvidia and AMD GPUs. Meta also recently announced a $9.1 billion investment to build its first AI data center in Canada and the largest outside the United States, located in Sturgeon County, Alberta. These developments collectively ease investor concerns about the return on Meta's massive capital expenditure program. On the negative side, the European Commission issued a preliminary finding today that Meta violated the Digital Services Act through addictive design features on Instagram and Facebook -- including infinite scrolling, autoplay, and highly personalized recommendation algorithms -- with a potential fine of up to €11 billion. Separately, Tencent is in talks to become the largest shareholder in Chinese AI startup Manus after Beijing ordered Meta's acquisition be reversed, with parties discussing unwinding the deal at the same $2 billion valuation. These regulatory and geopolitical headwinds provide some offset to the AI-driven optimism. The broader market offered a constructive backdrop, with the Nasdaq gaining +1.3% in the prior session to 26,206.89, led by a chip-sector rally, while the S&P 500 rose +0.8% to 7,543.64. Taken together, the Muse Spark 1.1 launch represents the clearest near-term signal yet that Meta is translating its enormous AI spending into tangible commercial products, helping the stock recover from well below its 52-week high of $796.25. With second-quarter earnings estimated for July 29, attention is now shifting to that report, with Wall Street expecting earnings per share of $7.18 and revenue projected to increase to $60.22 billion from $47.52 billion a year earlier -- a test that will determine whether today's pre-market enthusiasm is sustained. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Meta jumps 15% this week: Wall Street backs its AI spending

News Meta jumps 15% this week: Wall Street backs its AI spending Meta Compute offers a new revenue pitch, but no sales Meta rolled out Meta Compute this week, opening up its AI compute and models to outside customers and, at least on paper, giving investors a fresh revenue angle beyond advertising. The catch is that Meta still hasn't actually sold the service, and it would be walking into a market where Amazon Web Services, Microsoft Azure, and Google Cloud already have deep roots. Investors liked the pitch anyway. Shares rose 6% Friday and 15% for the week in July, Meta's best stretch since early 2024. Part of the reaction was simple: the market finally had a clearer revenue narrative for Meta's planned $125 billion to $145 billion in 2026 spending on data centers, chips, and models, after a year when the stock trailed the Nasdaq-100's 18% gain. Ads still account for 98% of revenue. Meta said Q1 revenue came in at $56.3 billion, up 33%. But the rally was really about cloud compute, the Meta Model API, Muse Spark 1.1, Muse Image, and Muse Video, all priced aggressively. If you watch Meta as more than an ads business, this update is worth a look. Nothing has been sold yet. Meta has never operated a public cloud at scale. Amazon Web Services, Microsoft Azure, and Google Cloud are firmly entrenched. And if the company builds too much capacity, that could end up looking like overbuilding. Still, there's plenty here for the market to latch onto. Meta's Training and Inference Accelerator chips are meant to reduce its dependence on Nvidia. Iris is set to enter mass production in September 2026. Analysts think data-center costs in 2027 could come down by as much as 35%. Wolfe says each gigawatt at a $25 billion annualized run rate could raise EPS by 20%. Options volume ran more than 3x average, with 78% of the $1.8 billion premium going into calls, and price targets sit between $720 and $869. The tools themselves will be available through Meta Compute and the Meta Model API.